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* C$ at C$0.9938 to US$, or $1.0062 * Bank of Canada chief Carney to take Bank of England job * Speculation rate hikes will be pushed out boosts debt * Greek deal expected; disappointment could roil markets * Stalled U.S. budget discussions also weigh By Alastair Sharp TORONTO, Nov 26 (Reuters) - The Canadian dollar weakened and bond prices rose on Monday as investors digested news that the governor of the Bank of Canada will leave his job next year to head Britain's central bank. The decision by Governor Mark Carney to change jobs and uncertainty over who will replace him, and what monetary policy stance the replacement will bring, gave a boost to short-term debt prices as some traders bet his successor could be more dovish. "The immediate reaction in the market was that rate hikes would get pushed out further that was evidenced by some price action in the front end of our curve," said Ian Pollick, a fixed income strategist at RBC Capital Markets. "But at this point it's a little too early to say." At 12:59 a.m. (1759 GMT) the two-year bond had gained 5 Canadian cents to yield 1.10, down from 1.11 percent before the news. The yield had dipped 2 basis points immediately following the news before giving back some of the decline. The Canadian dollar was trading at C$0.9938 to the greenback, or $1.0062, down from C$0.9920, or $1.0081, at Friday's North American close. "(The Canadian dollar) has weakened off in light of some uncertainty as to who will head the Bank of Canada come June, 2013," said Camilla Sutton, chief currency strategist at Scotiabank. "We are all well versed in where Governor Carney sat in terms of how he judged monetary policy and how he judged the fundamentals in Canada, and so having a new head of the central bank does introduce some uncertainty." She noted that even though Carney had been discussed as a contender for Bank of England governor, most market players had discounted his candidacy and were surprised by the news. Under Carney, the Bank of Canada has held rates steady for two years, and - unusual among major economies - was talking up an eventual raising of rates. Traders were also awaiting the results of Greek debt aid talks on Monday and continued to fret that pending U.S. tax hikes and spending cuts could spur a recession unless action is taken to blunt them. Euro zone finance ministers and the International Monetary Fund were attempting to release emergency aid for Greece for the third time in as many weeks, but they first had to agree if some of the official loans to Athens might eventually be forgiven to cut Greek debt. "The market is probably set up for something fairly decisive today (on Greece)," said Adam Cole, global head of FX strategy at RBC Capital Markets in London. "If they fail to agree yet again it could be quite violently negative." U.S. lawmakers have made little progress in the past 10 days toward a compromise to avoid the "fiscal cliff" of harsh tax increases and government spending cuts due to start to kick in in the new year, a senior Democratic senator said on Sunday.