Canada dollar slightly weaker as U.S. election eyed

Mon Nov 5, 2012 8:19am EST
 

By Alastair Sharp

TORONTO (Reuters) - The Canadian dollar weakened slightly against its U.S. counterpart on Monday, following the cautious tone in a raft of commodities as investors limit exposure to riskier assets ahead of Tuesday's U.S. presidential election.

The vote will be closely watched by financial markets, with incumbent Barack Obama seen as more supportive of continued stimulus measures, while Republican challenger Mitt Romney is expected not to favor additional easing.

"The move in the Canadian dollar is consistent with the move in most of the currencies that trade as risk proxies," said Adam Cole, global head of foreign exchange strategy at Royal Bank of Canada. "It may be the uncertainty of the U.S. election as one factor."

At 8:01 a.m. (1301 GMT) the Canadian dollar was trading at C$0.9964 to the greenback, or $1.0036, compared with C$0.9956, or $1.0044, at Friday's North American close.

Gold and oil were steady, while copper hit a two-month low.

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RBC's Cole said that worries about a Greek vote on Wednesday over austerity measures was keeping the euro under pressure and adding to the more cautious overall tone.

The Canadian currency strengthened against the euro, the British pound and the Swiss franc.

The price of Canadian government debt rose across the curve, with the two-year bond up 2 Canadian cents to yield 1.059 percent, while the benchmark 10-year bond rose 15 Canadian cents to yield 1.754 percent.

(Reporting by Alastair Sharp; Editing by Chizu Nomiyama)