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