CANADA FX DEBT-C$ edges weaker as commodity currencies dip

Tue Dec 18, 2012 9:26am EST
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* C$ at C$0.9846 vs US$, or $1.0156
    * Commodity-linked currencies dip on RBA minutes
    * Bond prices lower at long end

    By Andrea Hopkins
    TORONTO, Dec 18 (Reuters) - The Canadian dollar weakened
slightly against its U.S. counterpart in early trade on Monday
as commodity-linked currencies dipped after the Reserve Bank of
Australia said mining investment had likely peaked.
    While the euro strengthened against the greenback and global
shares approached a three-month high on signs of compromise in
U.S. talks to stop automatic tax hikes and spending cuts hurting
the economy next year, the Canadian dollar dipped.
    "CAD has weakened off a little since yesterday's close, it's
been a bit of a volatile morning," said Camilla Sutton, chief
currency strategist at Scotiabank. 
    "Interesting because the euro touched a new high overnight
but CAD is failing to make new gains."
    At 9:14 a.m. (1414 GMT), the Canadian dollar stood
at C$0.9846 versus the U.S. dollar, or $1.0156, slightly below 
Monday's North American close at C$0.9837 versus the 
U.S. dollar, or $1.0166. 
    "All the other commodity currencies are also slightly weaker
partially on the RBA's minutes, which highlighted that the
investment boom in the mining industry is likely peaking, as
well as a focus on employment, so that seems to be pulling down
commodity currencies a little bit," Sutton said.
    Australia's central bank said it decided to cut interest
rates this month rather than wait because it saw further
evidence that the peak in the mining investment boom was near,
while the non-resource sector showed no signs of picking up. 
    The Reserve Bank of Australia expects the mining investment
boom to peak sometime next year, according to minutes of the
bank's Dec. 4 meeting, released on Tuesday. 
    Canadian government bond prices were mixed, slipping across
the long end. The two-year bond was down 0.5 Canadian
cents to yield 1.155 percent, while the benchmark 10-year bond
 shed 16 Canadian cents to yield 1.841 percent.