Canadian dollar strengthens slightly as greenback resumes fall

Mon Mar 23, 2015 9:57am EDT
 
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By Andrea Hopkins

TORONTO (Reuters) - The Canadian dollar continued to strengthen against the greenback on Monday as last week's U.S. dollar selloff against major currencies was given another push by comments from a U.S. Federal Reserve official.

The greenback has struggled since a Fed statement last week that signaled a slower approach to raising interest rates than some investors had expected.

"We're seeing a bit of CAD strength really on the back of that broader U.S. dollar weakening," said Camilla Sutton, chief currency strategist at Scotiabank.

The dollar resumed its fall on Monday, after its steepest weekly drop in 3-1/2 years, as St. Louis Fed President James Bullard told CNBC that the dollar index, which measures the greenback against a basket of major currencies, was not far from fair value. He also said it was unclear how much more the dollar would strengthen against the euro. [MKTS/GLOB]

At 9:31 a.m. (1331 GMT) the Canadian dollar CAD=D4 was at C$1.2522 against the U.S. dollar, or 79.86 U.S. cents, stronger than Friday's North American session close of C$1.2579, or 79.50 U.S. cents.

Sutton said the U.S. dollar selloff could push the Canadian currency to near the 50-day average at C$1.2476, with last week's low at C$1.2450 the next resistance level.

Canadian government bond prices were mixed across the maturity curve, with the two-year CA2YT=RR flat to yield 0.457 percent and the benchmark 10-year CA10YT=RR rising 3 Canadian cents to yield 1.301 percent.

(Reporting by Andrea Hopkins; Editing by Peter Galloway)