Canada dollar flat vs U.S. dollar; market awaits central bank

Mon Jul 16, 2012 4:35pm EDT
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By Jennifer Kwan

TORONTO (Reuters) - Canada's dollar was little changed against its U.S. counterpart on Monday, but hit a record high versus the euro amid mixed North American economic data and as investors awaited comments from the Bank of Canada.

Against the greenback, the Canada's currency fell as low as C$1.0174, or 98.29 U.S. cents, after data showed U.S. retail sales fell for a third straight month in June.

But against the euro, the Canadian dollar hit another consecutive record high, adding to its string of recent gains. It advanced to C$1.2358, or 80.92 euro cents, its strongest level against the common currency since it was created in January 1999.

Data showed foreigners snapped up Canadian securities in record numbers in May, reflecting Canada's growing role as a safe haven during global economic turmoil.

Canada, which boasts stronger fiscal and economic fundamentals than most developed Western economies, said non-residents bought C$26.11 billion of stocks, bonds and money market paper in May, well above the previous C$22.88 billion record from May 2010.

"There are a number of concerns. The global growth backdrop, the U.S. growth backdrop and that I think is weighing on financial markets and keeping the Canadian dollar contained," said David Watt, chief economist at HSBC Bank Canada.

The Canadian dollar ended at C$1.0147 against the U.S. dollar, or 98.55 U.S. cents, little changed from Friday's North American session close at C$1.0146 versus the greenback, or 98.56 U.S. cents.

"Dollar/Canada has just been caught between general dollar moves and cross-related support for the currency," said Matt Perrier, director of foreign exchange sales at BMO Capital Markets.   Continued...

Images of the front and the back of the new Canadian 50 dollar bill, made of polymer, are seen on display before a news conference in Quebec City, March 26, 2012. REUTERS/Mathieu Belanger