By Frank Pingue
TORONTO (Reuters) - Canada's currency surged versus the U.S. dollar on Thursday as higher commodity prices and a rebound in global equities helped reduce risk aversion.
The rise in the Canadian dollar, which rallied as high as C$1.1555 to the U.S. dollar, or 86.54 U.S. cents, lifted it comfortably off the seven-week low it tumbled to on Wednesday.
"We've had a turnaround in stocks and commodities overnight, and so that has basically pushed risk aversion levels lower as a result," said George Davis, chief technical strategist at RBC Capital Markets. "But with equity markets stronger we've seen the U.S. dollar generally weaker across the board."
Davis said the Canadian currency also benefited from some stop loss orders once it moved below the C$1.1615 area as traders in London took profits on the U.S. dollar.
At 8:30 a.m., the Canadian unit was at C$1.1580 to the U.S. dollar, or 86.36 U.S. cents, up from C$1.1676 to the U.S. dollar, or 85.65 U.S. cents, at Wednesday's close.
Oil prices were back higher after a six-session skid while gold prices also recovered from the eight-week low touched in the prior session. Canada is a key exporter of oil and gold and its currency is often influenced by their prices.
The Canadian dollar could now stick in a range ahead of Friday's domestic jobs data. The report is expected to show the economy shed 35,000 jobs in June while the unemployment rate moves to 8.7 percent from 8.5 percent in May.
Domestic bond prices were lower across the curve alongside the bigger U.S. Treasury market after the Bank of England left its asset purchase program unchanged, reducing the appeal of more secure assets like government debt.
(Editing by Padraic Cassidy)
© Reuters Limited. All Rights Reserved.
Reproduction or redistribution of Reuters content, including framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
