CANADA FX DEBT-C$ extends losses as housing data helps US$

Wed Feb 20, 2013 9:26am EST
 
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* C$ at C$1.0152 versus US$, or 98.50 U.S. cents, a 7-month
low
    * U.S. housing slows, but outlook helps lift greenback

    By Alastair Sharp
    TORONTO, Feb 20 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart in early trade on Wednesday, hurt
by decent U.S. housing data that encouraged investors to return
to the greenback.
    The currency also fell against the euro and the
Swiss franc, but gained versus the British pound
 after minutes from the latest Bank of England meeting
showed policymakers were willing to ease policy further.
     
    At 9:13 a.m. (1413 GMT) the Canadian dollar was
trading at C$1.0152 to the greenback, or 98.50 U.S. cents,
compared with C$1.0118, or 98.83 U.S. cents, at Tuesday's North
American close.
    Those levels are the weakest for the loonie, as Canada's
currency is colloquially known, since last July when it traded
above $1.02.
    "It's consistent with markets being slightly risk-negative
and (U.S.) dollar positive for that matter," said Adam Cole,
global head of foreign exchange strategy at Royal Bank of
Canada.
    U.S. stock futures edged lower, European shares dipped and
gold and oil prices also fell.    
    Cole said that U.S. producer price data that showed a rise
in January would likely not affect investor views as inflation
data is not currently high on the Fed's agenda, while the
volatility of housing data limited its impact. 
    Investors will turn next to minutes from the U.S. Federal
Reserve, due to be released later on Wednesday. 
    Any hint the Fed is nearer a paring back of its asset
purchase program would help the greenback and hurt the loonie,
which has in recent months benefited from a comparatively
hawkish tone from the Bank of Canada.    
    The two-year bond was off half a Canadian cent to
yield 1.141 percent, while the benchmark 10-year bond
 fell 13 Canadian cents to yield 2.038 percent.