* C$ off high at C$0.9792 to the U.S. dollar, or $1.0212
* Bond prices flat to higher
* Foreigners sell Canadian securities in June
By Ka Yan Ng
TORONTO, Aug 17 Canada's dollar touched its
highest level in more than a week on Wednesday morning, helped
by stronger oil prices, but it then backed off, restrained by
anxiety over the state of the global economy.
Government bonds were flat to higher, reflecting some
disappointment that at a summit meeting on Tuesday France and
Germany had stopped short of increasing the size of the euro
zone's rescue fund and had rejected for now the idea of a
common euro bond. [ID:nL5E7JG0IH]
The currency rose as high as C$0.9776 to the U.S. dollar,
or $1.0229, before retreating to near its 200-day moving
average around C$0.9810.
The price of oil was up more than 2 percent to above $88 a
barrel on Wednesday after industry data released the previous
day showed U.S. gasoline stocks fell sharply last week.
North American stocks also opened higher, lending some
support to risk assets.
"Certainly the intense focus on financial instability has
faded. So dollar/CAD coming back from its recent highs does
make sense," said David Watt, senior currency strategist at RBC
Capital Markets. "But again, CAD is a still a cyclical
currency and we're still having a number of concerns about the
global economic outlook."
World stocks dipped while top-rated government bonds
rallied on Wednesday as investors grew concerned that French
and German plans for closer fiscal integration may be
insufficient to stop the regional debt crisis from spreading
For the first time since March 2010, foreigners reduced
their holdings of Canadian securities in June, selling C$3.5
billion ($3.6 billion) worth after buying C$15.3 billion in
May, Statistics Canada said on Wednesday. [ID:nN1E77G03R]
Investors had been piling money into Canada, apparently
eyeing its sound economy, banks, fiscal outlook and currency.
Even with June's reversal, the first half of the year showed
C$41.2 billion of foreign investment in Canadian securities.
At 9:35 a.m. (1435 GMT), the Canadian currency CAD=D4 was
at C$0.9792 to the U.S. dollar, or $1.0212, up from Tuesday's
North American finish at C$0.9821 to the U.S. dollar, or
Canada's two-year bond CA2YT=RR was unchanged to yield
0.998 percent, while the 10-year bond CA10YT=RR advanced 21
Canadian cents to yield 2.434 percent.
A C$3.5 bln tranche of two-year government of Canada Canada
bonds will be auctioned at noon.
(Reporting by Ka Yan Ng; editing by Peter Galloway)