CANADA FX DEBT-C$ eases against US$; gains vs some other majors

Wed Sep 19, 2012 10:01am EDT
 
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* C$ at C$0.9757 vs US$, or $1.0249
    * Slips as oil, commodity prices ease
    * Traders buying C$ vs other currencies
    * C$ touches four-month high vs yen
    * Bonds rise across curve

    By Solarina Ho
    TORONTO, Sept 19 (Reuters) - Canada's dollar eased against
its U.S. counterpart on Wednesday, hurt by a decline in oil and
other commodity prices, even as it made gains against the euro
and some other major currencies.
    Overseas, the euro erased gains as investors waited to see
whether Spain would apply for aid and trigger the European
Central Bank's bond-buying program. 
    Meanwhile, the Bank of Japan was the latest major central
bank to ease its monetary policy. The BOJ increased asset
purchases by more than double what some had expected. O v ernight,
the yen weakened to a four-month low of 81.42 yen to the
Canadian dollar before recovering.
    "I'm impressed at the way the Canadian dollar is holding up
in a risk-off day that today seems to be shaping up to be," said
Firas Askari, head of foreign exchange trading at BMO Capital
Markets, noting the softer euro, and easing crude and gold
prices.
    "At the end of the day, Canada isn't really the front story.
it's getting a little sidetracked on crosses but generally
people are still buying Canada on the crosses."
    At 9:45 a.m. (1345 GMT), the Canadian dollar was
trading at C$0.9757 versus the U.S. dollar, or $1.0249. It
finished Tuesday's North American session at C$0.9746, or
$1.0261.
    "My sense is Canada should weaken off a little bit from
these levels, but I am surprised by the amount of Canadian
dollar buyers we are seeing every time we get above C$0.9750."
    Askari said fundamentally, the currency should be trading
closer to the C$0.98 and C$0.9850 range. But with Canada being
the only member of the Group of Seven wealthy nations that has a
central bank with a tightening bias, he said the currency is
attracting international capital flows.
    Canadian government bond prices rose across the curve. The
two-year bond climbed 3 Canadian cents to yield 1.164
percent, while the benchmark 10-year bond gained 20
Canadian cents, yielding 1.893 percent.