CANADA FX DEBT-C$ softens on Europe fears, N.American data

Thu May 17, 2012 9:23am EDT
 
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* C$ softer at C$1.0137 vs US$, or 98.65 U.S. cents
    * Bond prices little changed across the curve

    TORONTO, May 17 (Reuters) - Canada's dollar softened against
the U.S. dollar on Thursday after uninspiring North American
data failed to offset the deepening turmoil in Greece and fears
of contagion spreading to other stressed euro zone economies.	
    Worries about Spain's banks also resurfaced after a report
that customers at Bankia had withdrawn more than 1
billion euros from their accounts in the past week, though the
Spanish government said there had been no exit of deposits from
the lender.  	
    The report followed suggestions that customers of Greek
banks were moving funds in anticipation of the country's exit
from the euro, adding to anxiety among investors about the lack
of a firm plan to deal with the region's worsening crisis.	
    "Negative risk-appetite in the market as concerns over
Europe and Greece continue to be forefront in market sights
here," said Matt Perrier, director of foreign exchange sales at
BMO Capital Markets.	
    At 9:07 a.m. (1305 GMT), the Canadian dollar stood
at C$1.0137 versus the U.S. dollar, or 98.65 U.S. cents,
slightly weaker than Wednesday's North American session close at
C$1.0127 versus the U.S. dollar, or 98.75 U.S. cents.	
    Perrier put near-term Canadian dollar support around
C$1.0180 and resistance around C$1.0023. 	
    Earlier, the currency had a knee-jerk negative reaction to a
mixed bag of North American economic data.	
    Foreign investors reduced their holdings of Canadian
securities for the second time in three months in March, largely
by selling off Canadian treasury bills. 	
    Meanwhile U.S. jobless claims held steady at 370,000,
slightly disappointing market expectations. 	
    Slightly higher than expected domestic wholesale trade
figures on the back of strength in the motor vehicles and parts
subsector did little to encourage investors. 	
    Canadian bond prices were little changed across the curve.	
    The two-year government bond edged up 2 Canadian
cents to yield 1.289 percent, while Canada's 10-year bond
 was down 4 Canadian cents to yield 1.927 percent.