* C$ ends up at 95.80 U.S. cents
* Hits 96.47 U.S. cents, highest level since Oct 20
* Bonds tumble on recent stock market rally
(Updates to close)
TORONTO, Dec 29 (Reuters) - The Canadian dollar finished
higher against the U.S. dollar on Tuesday, supported by firmer
oil and metals prices but it underperformed other
commodity-based currencies and backed off a 2-1/2-month high.
The Canadian dollar made gains against the U.S. dollar as
the price of oil headed toward $79 a barrel and some key metals
The higher-yielding Australian and New Zealand dollars rose
to near two-week highs, and were up more than 1 percent during
the session, before paring gains.
"Really the only interesting thing in currencies is New
Zealand is up 1.5 percent and Australia is up almost 1 percent
still. Besides that, it's been very very quiet and irregular
trading patterns overall," said Camilla Sutton, currency
strategist at Scotia Capital.
The Canadian dollar closed at C$1.0438 to the U.S. dollar,
or 95.80 U.S. cents, up from C$1.0499 to the U.S. dollar, or
95.25 U.S. cents, at Thursday's close. Canadian markets were
closed on Friday and Monday.
At one point on Tuesday, the Canadian dollar rose as high
as 96.47 U.S. cents.
Merger and acquisition activity also helped boost the
Canadian dollar. A C$679-million bid for metals explorer
Corriente Resources Inc <CTQ.TO> by China's CRCC-Tongguan
Investment Co Ltd helped lifted the share prices of several
Canadian miners. [ID:nSGE5BR09U]
The Canadian dollar was relatively steady after the
Standard & Poor's/Case-Shiller index showed U.S. home prices
were flat in October and government data showed U.S. consumer
confidence rose to a three-month high in December.
No Canadian economic data is on tap this week. Trading in
this holiday-shortened week is expected to be thin, which could
prompt the currency to make exaggerated and choppy moves.
BONDS UNDERPERFORM US TREASURIES
Canadian bond prices fell but were off session lows on
Tuesday. They were unable to keep up with gains made by their
U.S. counterparts after an auction of $42 billion in five-year
Treasury notes that went better than expected.
The five-year auction was the second of three scheduled for
this week in which a total of $118 billion in new debt is
planned to be sold.
The Canadian 10-year yield was 16.1 basis points below its
U.S. counterpart, compared with 24.7 basis points the previous
Risk appetite favored assets such as equities, which have
rallied as the end of the year approaches and as investors seem
to have put worries about a major world financial collapse
behind them. [MKTS/GLOB]
But most major indexes were near break-even in thin trade
by session's end on Tuesday in Europe and the United States,
although Canada's main stock index posted a decline.
The two-year government bond <CA2YT=RR> fell 14 Canadian
cents to C$99.59 to yield 1.468 percent, while the 10-year bond
<CA10YT=RR> dropped 46 Canadian cents to C$100.72 to yield
(Reporting by Ka Yan Ng; editing by Peter Gallow