Canadian dollar overlooks U.S. results in rangebound trade

Wed Jan 9, 2013 5:01pm EST
 
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By Claire Sibonney

TORONTO (Reuters) - Canada's dollar ended slightly lower against its U.S. counterpart on Wednesday, shrugging off a modest rally in other riskier assets after Alcoa (AA.N: Quote) opened the U.S. earnings season with an optimistic outlook.

Global equities staged a modest recovery after two days of losses. Even with the encouraging Alcoa report, investors lacked a clear view of how U.S. corporations fared in the fourth-quarter and the Canadian currency was rangebound.

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Adam Cole, global head of FX strategy at RBC Capital Markets in London, expected more reaction to U.S. earnings once they picked up steam.

"If that's where stocks take their direction then it's difficult to get away from that, being a fairly major barometer of pressure on CAD," he said.

There was caution a day ahead of European and British central bank policy meetings, as well as a Spanish auction that will test appetite for peripheral euro zone debt, and Chinese trade data.

On the home front, the next major event of interest is a speech on Thursday by Tiff Macklem, a senior Bank of Canada official widely tipped to replace the departing Governor Mark Carney.

"Investors are looking toward Tiff Macklem's speech to see if there are any hints of his policy takes, if they're any different from Carney's, which is highly unlikely I think," said John Curran, senior vice president at CanadianForex.   Continued...