CANADA FX DEBT-C$ slightly weaker as European fears weigh
* C$ weaker at C$1.0285 vs US$, or 97.23 U.S cents * Trade seen quiet ahead of U.S. holiday weekend * Canadian gov't 10-, 30-yr bond yields at record low By Andrea Hopkins TORONTO, May 25 (Reuters) - Canada's dollar was slightly weaker against its U.S. counterpart in early trade on Friday, as investors continued to worry about the risk of Greece leaving the euro zone, though trading quieted ahead of a U.S. three-day holiday weekend. U.S. stocks looked set to open little changed and the euro inched up from two-year lows, as wary investors looked for bargains after recent sharp losses and a smattering of positive economic data tempered earlier grim indicators. Analysts said the anticipation of the U.S. Memorial Day holiday on Monday and the absence of major news or events in Europe means trade will likely be subdued, keeping the Canadian dollar in a tight range near four-month lows. "It's pretty dull, to be honest, given that we've got very little in the way of news scheduled. Markets are all pretty flat and it is the U.S. three-day weekend -- that tends to suppress appetite for taking risk," said Adam Cole, global head of FX strategy at RBC Capital Markets in London. The Canadian dollar was slightly weaker at C$1.0285 versus the U.S. dollar, or 97.23 U.S. cents, down from Thursday's close at C$1.0271 versus the U.S. dollar, or 97.36 U.S. cents. Cole said the currency would likely trade between C$1.0226 and the session low of C$1.0296 hit on Wednesday and Thursday, a four-month nadir. "In the absence of a major decline in risk appetite, I would say that is very unlikely (to weaken past that)," Cole said. The currency has suffered alongside the euro, global stocks and other assets considered riskier on market uneasiness over Greece's possible exit from the euro zone. German consumer morale held steady going into June while Chinese exports showed signs of recovery in early May, countering dire recent data that suggested Europe's growth engine was no longer immune from the region's debt crisis and factory output in the world's number two economy was faltering. BOND YIELDS HIT RECORD LOWS The modest data boost helped the euro rise 0.3 percent to $1.2583, inching up from two-year lows of 1.25155 as bearish investors took a breather from a sharp sell-off. But the common currency stayed on track for its fourth straight week of losses. The uncertainty in Europe has hurt the Canadian dollar because investors have fled to the safety of the U.S. dollar and government debt. Canadian government bond prices climbed across the curve with the two-year bond up 10 Canadian cents to yield 1.092 percent, while the benchmark 10-year bond climbed 45 Canadian cents. The safe-haven buying drove longer-term Canadian bond yields to record lows. The 10-year yield sank as far as 1.796, while the 30-year bond yield hit an all-time low of 2.336 percent.
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