December 23, 2009 / 1:00 PM / in 11 years

CANADA FX DEBT-C$ climbs on recovery hope; GDP eyed

 * C$ higher at 95.16 U.S. cents
 * Bonds little changed across curve
 * Investors await Canada GDP for October
 By Jennifer Kwan
 TORONTO, Dec 23 (Reuters) - The Canadian dollar climbed
against the U.S. currency on Wednesday morning, lifted by
firmer oil prices and rising expectations for a solid economic
 World stocks rose in part on lingering effects of U.S. data
on Tuesday that showed sales of previously owned homes jumped
to the highest level in nearly three years last month, offering
the latest evidence that the housing market -- the main trigger
of the worst U.S. recession in 70 years -- is on the mend.
 "Our currency is bucking the general trend of other
currencies weakening against the greenback. It's a North
America play. We are seeing better economic numbers in Canada
and the U.S.," Sal Guatieri, senior economist, BMO Capital
 "The sense is if the U.S. economy is recovering that
supports Canadian exports and our currency. We get a bigger
bang for our buck from good U.S. economic data."
 At 7:39 a.m. (1239 GMT), the Canadian dollar was at
C$1.0509 to the U.S. dollar, or 95.16 U.S. cents, up from
Tuesday's finish at C$1.0579 to the U.S. dollar, or 94.53 U.S.
 The price of oil, a key Canadian export, held steady above
$74 a barrel as industry data showed a sharp drawdown in crude
stocks and a surprise fall in gasoline supply. [O/R]
 The move higher came ahead of domestic real gross domestic
product data for October, due at 8:30 a.m. It is expected to
build on strength from September and contribute to a healthier
fourth-quarter reading of growth after Canada barely exited
recession in the last quarter.
 While ongoing optimism about the economic recovery in
Canada and the U.S. added to positive momentum for the
currency, market watchers cautioned that price moves across
most markets are easily swayed by thin pre-holiday trade.
 Canadian bond prices were little changed across the curve,
in contrast to U.S. Treasuries, which edged higher. [US/]
 "We have outperformed the U.S. Treasury market during its
slide of the past week. The U.S. Treasury market has weakened
considerably on the view that the U.S. economy is recovering
and the (Federal Reserve) will need to raise rates next year,"
said Guatieri.
 (Reporting by Jennifer Kwan, Editing by Chizu Nomiyama)

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