CANADA FX DEBT-C$ edges up on U.S. retail sales and jobs boost

Wed Mar 13, 2013 9:56am EDT
 
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* C$ at C$1.0251 vs US$, or 97.55 U.S. cents
    * C$ seen trading between C$1.0220 and C$1.0320 on Wednesday
    * U.S. retail sales better than expected
    * Bond prices weaker across curve

    By Solarina Ho
    TORONTO, March 13 (Reuters) - The Canadian dollar was
marginally stronger against the U.S. dollar on Wednesday, helped
in part by better-than-expected U.S. retail sales, but a dearth
of domestic data limited moves for the currency.
    Retail sales out of Canada's largest trading partner rose
more than expected in February as Americans bought motor
vehicles and a range of other goods even as they paid more for
gasoline, suggesting consumer spending this quarter will hold up
despite higher taxes. 
    "We're finally back in what you would consider a normal
mode, where stronger data in the U.S. is typically positive for
the U.S. dollar. But we haven't lost that much ground against
the U.S.," said Mark Chandler, head of Canadian fixed income and
currency strategy at RBC Capital Markets.
    Chandler also attributes the Canadian dollar's strength in
part to the lingering effects of the last week's employment
report, which showed an unexpected surge in jobs last month.
    At 9:19 a.m. (1319 GMT), the Canadian dollar was
trading at C$1.0251 to the greenback, or 97.55 U.S. cents,
compared with C$1.0261, or 97.46 U.S. cents, at Tuesday's North
American close.
    The currency is expected to trade between C$1.0220 and
C$1.0320, according to a Scotiabank research note.
    The Canadian dollar was stronger against the euro and Swiss
Franc, but softened against the sterling after Canada on Tuesday
touched its strongest level against the British pound since June
2010 on dismal UK manufacturing data. 
    There is little that is expected to move markets on the
economic data front for Canada this week, though Chandler said
the currency could move if Friday's report on existing home
sales is particularly weak. 
    The price of Canadian government debt was weaker across the
curve, with the two-year bond off 2.5 Canadian cents
to yield 0.976 percent, while the benchmark 10-year bond
 eased 11 Canadian cents to yield 1.923 percent.