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CANADA FX DEBT-C$ edges higher as oil climbs

Published 06/11/2009, 09:39 AM
Updated 06/11/2009, 09:58 AM

By Jennifer Kwan

TORONTO, June 11 (Reuters) - The Canadian dollar rose against the U.S. dollar on Thursday, lifted in part by firmness in global equities and higher oil prices after the International Energy Agency raised its 2009 oil demand estimates.

At 9:18 a.m. (1318 GMT), the currency was at C$1.1023 to the U.S. dollar, or 90.72 U.S. cents, compared with Wednesday's finish at C$1.1080 to the U.S. dollar, or 90.25 U.S. cents.

World stocks edged up and the U.S. dollar rose against the yen on Thursday after U.S. economic data showed a rise in U.S. retail sales and a slight decline in first-time jobless claims. [MKTS/GLOB] [FRX/]

Oil rose to $72 a barrel after the IEA raised its estimate for 2009 oil demand, adding to signs the fall in consumption may have bottomed out. [ID:nSIN191080]

Investors would most likely be eyeing a speech by Bank of Canada Governor Mark Carney later on Thursday, said George Davis, chief technical strategist at RBC Capital Markets.

"He may either discuss the Canadian dollar in his speech or be asked about it later," said Davis.

"It's going to be interesting to see what the bank says if that issue does come up. I think they'll certainly flag the risks that the strength in the Canadian dollar brings to the recovery."

The federal government will also be providing a fiscal update, but that event will likely have a negligible effect on the Canadian dollar, said Davis.

"Unless we get a shocking about face in terms of any type of indication that the deficit it is going to be a lot less than what's been projected of about C$50 billion ... I don't think that's going to have much of an impact," he said.

Canadian bond prices were lower across the curve, following the U.S. Treasuries market where treasuries erased losses on technical buying after the 10-year yield rose to 4.0 percent in the previous session.[ID:nN11288213]

(Editing by Kenneth Barry)

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