CANADA FX DEBT-C$ rises on hope for global economic rebound

 * C$ bounces back after Tuesday's 1.6 percent skid

 * Hope for economic rebound gives modest bid to C$

 * Bond prices mostly down ahead of U.S. mortgage plan

 TORONTO, Feb 18 (Reuters) - Canada's dollar rallied versus
the greenback on Wednesday as traders who are banking on a
global economic rebound this year viewed the currency's skid in
the previous session as a buying opportunity.

 The turnaround in the Canadian dollar came alongside other
commodity-linked currencies that were sent higher, helped by
oil prices that, while lower, did not add significantly to
their near 7-percent fall on Tuesday.

 During Tuesday's session, concerns about a deepening global
recession curbed investor appetite for risk and gave a boost to
the low-yielding greenback. But the momentum faded overnight.

 "We do have a lot of people ... thinking that things are
going to get better and so people are prepared to take some of
the risky currencies on board," said David Watt, senior
currency strategist at RBC Capital Markets.

 "I'm still at the point where I'm not convinced that we are
going to get a second-half rebound ... but people are looking
for reasons to be optimistic on certain currencies."

 Canada's economy relies heavily on exports, so a rebound in
the global economy is key to its currency's performance. The
Canadian dollar has fallen about 15 percent since October.

 At 9:30 a.m. (1430 GMT), the Canadian currency was at
C$1.2566 to the U.S. dollar, or 79.58 U.S. cents, up from
C$1.2637 to the U.S. dollar, or 79.13 U.S. cents, at Tuesday's
close.

 Earlier, the Canadian dollar rallied as high as C$1.2535,
or 79.78 U.S. cents, comfortably off the near one-month low of
C$1.2675, or 78.89 U.S. cents, touched on Tuesday.

 Data that showed Canada's wholesale trade fell 3.4 percent
in December from November, the biggest decrease in more than
five years and steeper than analysts had predicted, did not
have any noticeable impact on the currency.[ID:nN18424182]

 "Canadian data overall in this situation isn't really going
to have a huge impact," Watt said. "This data is so dated and
it plays into the story that we already know."

 The Bank of Canada has said Canada's economy will suffer a
4.8 percent contraction, annualized, in the first quarter of
2009, and likely shrank in the fourth quarter of 2008.

 BOND PRICES DOWN AT SHORT END

 Canadian bond prices, with no key data to trigger a move,
followed the bigger U.S. Treasury market down across the short
end ahead of the announcement of U.S. President Barack Obama's
plan to help troubled homeowners.

 The plan, which Obama is due to unveil at 12:15 p.m. will
establish a $75 billion homeowner stability initiative that
will help keep between 3 million and to 4 million "responsible
homeowners" in their homes. [ID:nN18421041]

 Canadian data still due this week are January's composite
leading indicator on Thursday and the key consumer price index
report for January due on Friday.

 The interest-rate sensitive two-year bond was down 11
Canadian cents at C$102.65 to yield 1.238 percent, while the
10-year bond dropped 10 Canadian cents to C$111.60 to yield
2.819 percent.

 The 30-year bond was up 25 Canadian cents at C$125.90 to
yield 3.542 percent.
 (Editing by Peter Galloway)