(Corrects to delete the words "higher than expected" to the
upward revision of U.S. GDP. The upward revision was lower than
some economists had expected)
* C$ closes up at 98.60 U.S. cents
* Bond prices lower across curve
* Oil hits two-year high, stocks rise
* US Q3 GDP revised up, home resales rise
(Updates to close)
TORONTO, Dec 22 (Reuters) - Canada's dollar rose against
the greenback on Wednesday, rebounding from a recent slide as
the price of oil hit a two-year high and stronger U.S. data
signaled the economy was ending the year on more solid ground.
Oil, a key Canadian export, rose after news of a drop in
U.S. inventories and cold weather on both sides of the
The positive correlation between the performance of global
commodity prices and the Canadian dollar appeared to be
relevant again after breaking down in the last few sessions.
Also benefiting Canada's risk-related currency, U.S. home
resales rose in November and third-quarter gross domestic
product got an upward revision. [ID:nN22291718] The stronger
U.S. data encouraged risk takers, a trend that supported stock
prices as well as the Canadian dollar.
"If you look at the global macro environment, it's
generally better sentiment," said Sacha Tihyani, currency
strategist at Scotia Capital.
"It's a bit of a reversal of underperformance over the past
couple days, more support of equity prices, surer support of
oil, and the fact that the U.S. numbers didn't disappoint."
The Canadian currency
closed the North American
session at C$1.0142 to the U.S. dollar, or 98.60 U.S. cents, up
from C$1.0175 to the U.S. dollar, or 98.28 U.S. cents, at
The Canadian dollar was among the day's best performing
major currencies and ended four straight sessions of losses
against the greenback.
Tihanyi said the currency broke out of a very tight trading
range on Wednesday, but should hold between C$1.01 and C$1.0210
"We had a couple days of weakness in the Canadian dollar,
and there is a threshold through which the market wasn't
willing to bring it past, and I think that was probably seen as
a good value level to buy Canadian dollars in the near term,"
"In the big scheme of things, the Canadian dollar remains
in a pretty good uptrend. Canada's going to grind higher but
there won't be enough gas to push through par (with the U.S.
dollar) before year-end," said Michael O'Neill, managing
director at Knightsbridge Foreign Exchange.
Scotia's Tihanyi said that given the seasonal light
volumes, the currency's direction may be driven more by flows
-- even relatively small orders -- than anything else, and
recent year-end trends have favored the U.S. dollar over
Traders will now turn their attention to Canada's gross
domestic product figures for October, due Thursday. It's the
last major piece of data before the Christmas and New Year
With riskier assets back in play, Canadian bond prices
fell, tracking U.S. Treasuries after the U.S. Federal Reserve
completed its last purchases until next week, and ahead of new
The two-year bond
was down 6 Canadian cents to
yield 1.658 percent, while the 10-year bond shaved
off 15 Canadian cents to yield 3.160 percent.
(Reporting by Claire Sibonney; editing by Peter Galloway)