February 17, 2011 / 1:34 PM / 9 years ago

CORRECTED - CANADA FX DEBT-Canadian dollar hits highest since March 2008

 * C$ rises to $1.0175
 * Bonds flat-to-higher ahead of U.S. CPI
 (Corrects to show C$ at highest level since March, not
 By Ka Yan Ng
 TORONTO, Feb 17 (Reuters) - Canada's dollar hit its highest
in nearly three years, spurred by cautious optimism on the U.S.
economy from the U.S. Federal Reserve and buoyed by a firm oil
price and a positive outlook for global equity markets.
 The currency jumped as high as C$0.9816 to the U.S. dollar,
or $1.0187, its highest since March 2008.
 At 8:15 a.m. (1315 GMT), the Canadian dollar CAD=D4 was
at C$0.9828 to the U.S. dollar, or $1.0175, surpassing the 2011
high reached earlier this month at C$0.9832 to the U.S. dollar,
or $1.0171. [MKTS/GLOB]
 It was also firmer than Wednesday's North American session
close at C$0.9849 to the U.S. dollar, or $1.0153.
 "Although we're at new (dollar/Canada) lows, I'm not sure
it's sustainable or if it's going to extend that much," said
Shaun Osborne, chief currency strategist at TD Securities, but
noted a push beyond C$0.98 could open the way to further
Canadian dollar strength.
 "There's really not that much in terms of technical
resistance below these levels."
 He said a sustained rally may be helped by significantly
higher oil prices, or a renewed widening out in Canada/US
short-term rate spreads. But he also cautioned that a stronger
Canadian dollar will be noticed by the Bank of Canada.
 The Canadian central bank stressed in its January
policy-setting that the high-flying Canadian dollar was
hampering recovery in the export sector, the backbone of the
Canadian economy. [CA/INT]
 Canadian bond prices were flat to higher across the curve,
taking a cue from U.S. Treasuries. [US/]
 The two-year Canadian government bond CA2YT=RR was up 1
Canadian cent to yield 1.938 percent, while the 10-year bond
CA10YT=RR rose 8 Canadian cents to yield 3.493 percent.
 (Reporting by Ka Yan Ng; Editing by Theodore d'Afflisio)

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