CANADA FX DEBT-C$ firms by half cent as US$ hit by broad sell-off

Thu Mar 14, 2013 5:02pm EDT
 
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* C$ at C$1.0223 vs US$, or 97.82 U.S. cents
    * Bids in euro, sterling sparks broad US$ sell-off
    * U.S. jobless claims fall for third straight week
    * C$ touches weakest level against AUD in more than a year

    By Solarina Ho
    TORONTO, March 14 (Reuters) - The Canadian dollar
strengthened against the U.S. dollar on Thursday, benefiting as
the greenback fell from a seven-month high against a slew of
major currencies.
    Bids in euro and sterling in particular, created a
widespread move to sell the U.S. dollar, with some investors
booking profits following its recent strength on optimism over
the U.S. economy.
    Stop-loss orders - placed to sell when a currency reaches a
certain price - were triggered in both in euro and in sterling
near the end of the European trading day, creating a sell-off of
the U.S. dollar across the board, said Jack Spitz, managing
director of foreign exchange at National Bank Financial. 
    He added that the Canadian dollar tripped its own
"stop-losses" as a result.
    "Does it change the picture for the Canadian dollar? Not
really, but it has managed to squeeze out some of the softer
dollar-longs that have been in the market for quite some time,
looking for a move above C$1.03," said Spitz.
    The currency finished its North American trading session at
C$1.0223 against the U.S. dollar, or 97.82 U.S. cents. This was
half a cent stronger than Wednesday's finish at C$1.0273, or
97.34 U.S. cents.
    Earlier in the session, better-than-expected U.S. jobless
claims bolstered the greenback against a range of currencies,
including a three-month peak versus the euro. 
    The U.S. dollar has found support in recent weeks on a
string of positive data that has bolstered hopes the U.S.
economic recovery is gaining steam.
    The Canadian dollar outperformed most of its major currency
counterparts, except for sterling and the Australian
dollar, where it touched its weakest level in more
than a year.
    The Canadian dollar touched its strongest level against the
euro since January 23.
    Euro/CAD "took out last week's lows and extended it a little
bit and prompted some Canada strength on the cross," said Matt
Perrier, a director of foreign exchange sales at BMO Capital
Markets.
    There is little on the Canadian data front for the remainder
of the week, although some analysts have said the currency could
see some movement if Friday's report on existing home sales is
particularly weak. 
    Canadian data out Thursday, including reports on new home
prices and capacity utilization, had little market impact.
  
    The price of Canadian government debt was lower across the
curve, with the two-year bond off 6 Canadian cents to
yield 1.006 percent, while the benchmark 10-year bond
 fell 30 Canadian cents to yield 1.951 percent. The
bonds were offering the highest yields in about two weeks.