CANADA FX DEBT-C$ slips to near 2-week low on China fears

Tue Mar 20, 2012 4:33pm EDT
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* C$ ends at C$0.9918 vs US$, or $1.0083

* China, commodity fears weigh

* Bonds yields back away from 2012 highs

By Claire Sibonney

TORONTO, March 20 (Reuters) - The Canadian dollar sank to a near two-week low against its U.S. counterpart on Tuesday as renewed concerns about China's economic growth boosted the greenback's safe-haven appeal.

Global miner BHP Billiton said it saw signs that growth in iron ore demand was flattening in China, sending global stock markets down and bond prices up.

In addition, China's National Development and Reform Commission raised domestic retail energy prices for the second time in less than two months. Even though that still leaves a wide gap between international and domestic prices, investors were concerned that higher energy costs could further undermine an already slowing Chinese economy.

Mazen Issa, Canada macro strategist at TD Securities, said the news from China set a negative tone in sentiment for the day, but still expected the Canadian dollar to stick to its tight range around parity against the U.S. dollar.   Continued...