REFILE-CANADA FX DEBT-C$ hits 3-week high on US stimulus hopes

Mon Aug 29, 2011 8:26am EDT

 (Refiles to fix typo in the headline)  
 *C$ hits high of C$0.9757 vs US$, or $1.0245
 *Bonds prices drift lower in risk-on bid
 By Claire Sibonney
 TORONTO, Aug 29 (Reuters) - The Canadian dollar climbed to
its highest level against the U.S. dollar in more than three
weeks on Monday morning after Federal Reserve Chairman Ben
Bernanke left the door open on Friday for further action to
stimulate the U.S. economy.
 With London markets closed for a holiday on Monday, volume
was lighter than usual. But the risk-on mood was boosted by
strong U.S. equity futures after Hurricane Irene was downgraded
to a tropical storm, causing less damage than feared in New
York, the U.S. financial center. [.N]
 The Canadian dollar CAD=D4 hit a session high of C$0.9757
to the U.S. dollar, or $1.0249, its strongest level since Aug.
5.
 "There is a risk-on feeling to the markets," said David
Bradley, director of foreign exchange trading at Scotia
Capital. "After Bernanke speaking last week, equity markets
have rebounded quite nicely, so the Canadian dollar is testing
towards the lows we've seen for the month."
 Bernanke gave no details on Friday of further action to
boost the U.S. economy but said the central bank's policy panel
would meet for two days next month instead of one to discuss
additional monetary stimulus, offering some hope to the market
of a move then. [nN1E77R0GB]
 Bradley said a close below the C$0.9740 area could signal a
rally towards C$0.9690.
 He said that end-of-month equity rebalancing in the next
couple of sessions may also be positive for the Canadian dollar
against the euro, as European stocks have been hit hard
recently.
 At 7:58 a.m. (1158 GMT), the Canadian dollar was at
C$0.9761 to the U.S. dollar, or $1.0245, up from Friday's North
American close of C$0.9830 to the U.S. dollar, or $1.0173.
 Bond prices drifted lower in the risk-on environment.
 The two-year bond CA2YT=RR was down 4 Canadian cents to
yield 1.018 percent, while the 10-year bond CA10YT=RR shed 20
Canadian cents to yield 2.416 percent.
 (Reporting by Claire Sibonney; editing by Peter Galloway)



























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