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* C$ down at C$0.9861 vs US$, or $1.0141 * Bond prices extend gains across curve By Claire Sibonney TORONTO, Jan 16 (Reuters) - The Canadian dollar drifted lower against the U.S. dollar on Wednesday as poor global economic data rekindled fears about the health of the world economy. A slow economic recovery in developed nations is holding back the global economy, the World Bank said, as it sharply cut its outlook for world growth in 2013. Meanwhile, the economic outlook for the euro zone darkened as data showed new-car sales in December had plunged to their the lowest since 1995, with top producers like Volkswagen suffering heavy falls. The news comes a day after Germany said its economy shrank at its fastest pace in almost three years in the final quarter of 2012. "I don't know if it's a Canadian dollar story at these levels currently. I think it's kind of taking its cues from risk-on and risk-off and (U.S.) dollar-based moves more than anything," said Darcy Browne, managing director of capital markets trading at CIBC. The Canadian dollar ended the North American session at C$0.9861 versus the greenback, or $1.0141, weaker than Tuesday's close at C$0.9841, or $1.0162. "There still continues to be really good (U.S. dollar) selling around the C$0.9875-85 level which is currently capping the range and has been for the last week," added Browne. "The dips are being bought at the lower end of the range, C$0.9825-30." The currency trimmed some of its earlier losses as U.S. stock markets advanced on strong financial results. The Canadian dollar was weaker on the crosses, falling against the yen with the U.S. dollar for a second straight session after a recent warning from a Japanese official about excessive yen weakness continued to underpin the currency. The Canadian dollar was also slightly softer versus the euro on persistent concerns about the region's economy. The currency has been trading within the C$0.98 to parity range against the greenback over the last couple months. John Curran, senior vice president at CanadianForex, noted that rangebound trading was seen in other commodity currencies such as the Australian and New Zealand dollars as well. "People are comfortable with their levels against the U.S. dollar for those (commodity) currencies," he said. "There's still a bit of a premium attached to all of them." Curran noted near-term Canadian dollar support around C$0.9880. Breaching that level would open up further weakness toward C$0.9920. Canadian bond prices picked up across the curve, following U.S. Treasuries up as traders extended the previous day's gains on mounting concerns about a looming political battle in Washington to raise the government's debt limit. Canada's two-year bond rose 3 Canadian cents to yield 1.169 percent, while the benchmark 10-year bond added 15 Canadian cents to yield 1.892 percent.