CANADA FX-C$ edges higher as markets fret over 'fiscal cliff'
* C$ at C$0.9995 vs US$, or $1.0005 * Chinese industry, exports and retail sales beat forecasts * C$ underperforms Aussie, New Zealand dollars By Solarina Ho TORONTO, Nov 12 (Reuters) - The Canadian dollar notched a small gain against its U.S. counterpart in quiet trading on Monday after touching a three-month low in the previous session. The currency echoed the limited moves made on Monday by equity markets, where worries about the possibility of a fiscal crisis in the United States overshadowed encouraging economic data from China. [ "There's not much to move on today. That reflects the ranges and levels for the both the Canadian dollar and equities," said Benjamin Reitzes, senior economist and foreign exchange strategist at BMO Capital Markets. Reitzes noted that worries over the repercussions of massive spending cuts and tax increases due to kick in in the United States early next year hit sooner than people expected. Investors fear the U.S. economy could head back into recession, unless the White House and Congress reach a deal to avert the budget actions. "We're optimistic things will work out and that should bode well for the Canadian dollar, though in the interim you could get some meaningful volatility as there are concerns the U.S. economy could go off that fiscal cliff," Reitzes said. The Canadian dollar finished Monday's trading at C$0.9995 versus the U.S. dollar, or $1.0005, stronger than the previous North American session finish of C$1.0013, or 99.87 U.S. cents. Canada's dollar was outperforming most other major currencies, but was underperforming its fellow commodity-linked currencies - the Australian and New Zealand dollars - which benefited more from the Chinese data. Figures showed China's industrial output, exports and retail sales all beat expectations in October. The results offered a reassurance that the economy of one of the world's largest consumers of copper and oil - among other commodities - was turning the corner. "On the face of it, the Chinese numbers overnight were probably a little bit better, suggesting some strength in the export markets," said Shaun Osborne, chief currency strategist at TD Securities, but he cautioned that more data from China, as well as the United States and Europe, is needed to suggest traction in the global economic recovery. Bond markets were closed in the United States and Canada for Veterans Day and Remembrance Day respectively, and government offices in both countries were also closed. The currency may find light direction from Canadian manufacturing and home sales data later this week as well as retail sales from the United States. Superstorm Sandy is expected to have impacted the retail sales data.
© Thomson Reuters 2016 All rights reserved.