Wednesday November 11, 2009 - 22:34:10 GMT
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Reuters - www.reuters.com
Forex Market News - CANADA FX DEBT-C$ hits 3-week high in third day of gains
Wed Nov 11, 2009 4:26pm EST
* C$ closes at C$1.0461 to the US$
* Commodities and data help fuel gain
* Bond market closed for Remembrance Day
By Frank Pingue
TORONTO, Nov 11 (Reuters) - Canada's currency rose to its
highest close in three weeks on Wednesday in a listless session
in which firmer commodities prices sparked an early rally
before activity ground to a halt later in the day.
Chinese factory output data that signaled the world's
third-largest economy had put the worst of the global financial
crisis behind it also helped sentiment. [ID:nPEK212006]
The Chinese report helped send gold prices to record highs
near $1,120 an ounce while oil prices firmed above $79 a
barrel. [GOL/] [O/R] Both are key Canadian exports and their
prices often influence the direction of the Canadian dollar.
The Canadian dollar rallied to C$1.0433 to the U.S. dollar,
or 95.85 U.S. cents, early in the day, its highest level since
Oct. 22, before backing off as trade became muted trade as
Canada observed Remembrance Day and the United States observed
"As soon as (European traders) left late morning things
just kind of ground to a halt and we've been in a ... range all
afternoon," said David Bradley, director of foreign exchange
trading at Scotia Capital.
Compounding the domestic currency's gain was a greenback
that extended a recent slide on concerns about the U.S. economy
and expectations for interest rates to remain low.
A bevy of U.S. Federal Reserve officials have bolstered
that view this week, warning the recovery would be erratic and
hinting that interest rates will remain low for some time.
"I would imagine with recent Fed speak kind of indicating
that interest rates in the U.S. could be on hold past 2010 that
you're going to continue to see a deterioration in the U.S.
dollar, which will be Canadian-dollar positive," Bradley said.
The Canadian dollar closed at C$1.0461 to the U.S. dollar,
or 95.59 U.S. cents, up from C$1.0501 to the U.S. dollar, or
95.23 U.S. cents, at Tuesday's close. That was its highest
close since Oct. 21 and its third straight day of gains.
The Canadian bond market was closed on Wednesday for
Activity could pick up for the remainder of the week as
investors digest September data for new house prices on
Thursday, followed by Friday's September trade report.
(Editing by Peter Gallowa
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