Canada's $ rises against greenback

TORONTO: Canada's dollar rose against a broadly weaker U.S. dollar on Tuesday as after bearish comments out of China on U.S. assets and improved market sentiment on Greece helped put a floor under commodity prices.

The U.S. currency hit a one-month low against a basket of currencies on Tuesday after a Chinese official warned against the risks of "excessive" U.S. dollar holdings, as Washington could take steps to further weaken the greenback.

U.S. Federal Reserve Chairman Ben Bernanke will be speaking on the U.S. economy later on Tuesday.

Improved investor confidence was also working in the Canadian dollar's favour, said David Tulk, chief Canada macro strategist at TD Securities.

"There were some pretty encouraging data out of Europe, as well as some constructive comments by ECB's Trichet talking about the potential rollover of some of Greece's debt," he said.

European Central Bank chief Jean-Claude Trichet said a restructuring of Greece's public debt, which many in the market see as inevitable, is inappropriate as long as the government follows through on reforms.

"That's generally putting markets in more of a bit more of a positive mood and showing up as a weaker dollar that has helped the Canadian dollar, along with other currencies," Tulk said.

At 9:20 a.m., the Canadian dollar was at C$0.9740 to the U.S. dollar, or $1.0276, up from a North American close of C$0.9808, or $1.0196, on Monday. The currency spent the overnight session in a range of 0.9802 and 0.9735.

The weaker greenback gave a boost to commodities traded in U.S. dollar. The price of gold rose firmed to $1550 an ounce before falling back to around $1545.

Canada is a major exporter of commodities, and swings in their prices often influence its currency

Canada's two-year bond was down 3 Canadian cents to yield 1.444 percent, while the 10-year bond was down 40 Canadian cents to yield 3.051 percent.

Copyright Reuters, 2011