Canada's dollar rose against theU.S. currency early on Thursday on the backdrop of highercommodity prices and growing expectations that domestic jobsdata due later this week could be better than expected.
Helping drive Canada's commodity-linked currency higher wasa rise in gold prices to a record high for the third successivesession and a rally in oil prices above $70 a barrel on signsof global economic recovery.
The upbeat tone, which created demand for riskier assets,was aided by Australian employment data that surged pastexpectations and added to the case for more interest rate risesthis year.
Earlier this week the Reserve Bank of Australia raised itsinterest rate, becoming the first central bank in the Group of20 nations to tighten policy as the financial crisis abates.
The rate hike and then the strong job numbers overnightjust gave people a reason to stay long in risky assets and morethan enough reason to sell the U.S. dollar again. said DavidWatt, senior currency strategist at RBC Capital Markets inToronto.
I don't necessarily know to what extent Australia is thelitmus test for the rest of the global economy, but that's therole it's taken on right now, At 7:30 a.m. (1130 GMT), the Canadian unit was at C$1.0561to the U.S. dollar, or 94.69 U.S. cents, up from C$1.0624 tothe U.S. dollar, or 94.13 U.S. cents, at Wednesday's close.
Watt said the recent upward swing in sentiment has somepeople thinking maybe, just maybe Canada could have apositive surprise when jobs data for September is releasedearly on Friday. The report is expected to show the domestic economy created5,000 jobs in September while the unemployment rate rose to 8.7percent.
Domestic bond prices were pinned slightly lower across the curve alongside the bigger U.S. Treasury market.