July 20, 2009 / 1:15 PM / 11 years ago

CANADA FX DEBT-C$ hits five-week high, helped by commodity gains

 * C$ climbs as high as C$1.1019 to the U.S. dollar
 * Commodity price rally, risk appetite drive gain
 * Bond prices lower across curve
 By Frank Pingue
 TORONTO, July 20 (Reuters) - The Canadian dollar shot to
its highest level in just over five weeks on Monday, driven by
a rally in commodity prices and increased optimism about the
state of the global economic recovery.
 Canada's currency rallied as high as C$1.1019 to the U.S.
dollar, or 90.75 U.S. cents, which marked its highest level
since June 12. The move came on the heels of its 4.4 percent
rally last week.
 "The markets have been feeling a lot better about things,
whether it's the earnings reports that we saw last week or just
the fact that people are starting to feel that things are
starting to turn the corner again," said Steve Butler, director
of foreign exchange trading at Scotia Capital. "The world just
looks like an awfully safe place once again this morning."
 By 9:00 a.m. (1300 GMT), the Canadian unit eased slightly
to C$1.1053 to the U.S. dollar, or 90.47 U.S. cents, which was
still up from Friday's close of C$1.1161 to the U.S. dollar, or
89.60 U.S. cents.
 Higher prices for oil and gold, both key Canadian exports,
helped lure traders into the Canadian dollar, while demand for
more risky assets also lent the currency a boost.
 Domestic bond prices were down across the curve as news
that retail and small business lender CIT Group reached a deal
late on Sunday could allow it to avoid bankruptcy cut demand
for more secure government debt. [nN19323064]
 (Editing by Jeffrey Hodgson)

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