July 16, 2009 / 12:00 PM / 11 years ago

CANADA FX DEBT-C$ turns lower following three-day surge

 * C$ slips to C$1.1185 to the U.S. dollar
 * Move follows three sessions of gains
 * Bond prices higher across curve
 By Frank Pingue
 TORONTO, July 16 (Reuters) - Canada’s currency fell versus the greenback on Thursday as investors pocketed recent gains that some experts said might have been overdone after a surge in the prior session.
 The pullback in the Canadian dollar did not draw concern as it came on the heels of a session where it raced to its highest level in more than a month, when it touched C$1.1117 to the U.S. dollar, or 89.95 U.S. cents.
 At 7:45 a.m. (1145 GMT), the Canadian unit was at C$1.1185 to the U.S. dollar, or 89.41 U.S. cents, down from C$1.1143 to the U.S. dollar, or 89.74 U.S. cents.
 “Just some risk aversion coming back to markets probably weighing on the loonie,” said Sal Guatieri, senior economist at BMO Capital Markets in Toronto. “The loonie’s rally seems to have gone beyond that warranted by the run-up in commodity prices, so it may have gotten ahead of itself and was due for a pullback.”
 During the overnight session the Canadian dollar fell as low as C$1.1226 to the U.S. dollar, or 89.08 U.S. cents.
 Oil prices were down as investors remained cautious about the pace of economic recovery, a factor that likely weighed on the domestic currency since oil is a key Canadian export.
 Heading into Thursday’s session the Canadian dollar was up about 4 percent for the week.
 Canadian bond prices were up across the curve as appetite for more secure assets like government debt increased as news of a breakdown in talks on bailing out U.S. lender CIT Group Inc (CIT.N) made a bankruptcy filing of the company possible. [ID:nN15377230]  (Editing by Padraic Cassidy)                                                  

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