CANADA FX DEBT-C$ flat vs greenback, gains against other major currencies

Thu Jul 18, 2013 9:39am EDT
 
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* C$ at C$1.0414 vs US$, or 96.02 U.S. cents
    * Decent North American data helps both currencies
    * C$ gains against string of other major currencies

    By Alastair Sharp
    TORONTO, July 18 (Reuters) - The Canadian dollar was flat
against its U.S. counterpart but gained against other major
currencies in early trade on Thursday, as stronger-than-expected
second-tier data helped both currencies climb against global
peers.
    The loonie, as Canada's currency is colloquially known, rose
strongly against the yen as investors reduced
exposure to that currency ahead of a weekend election. It also
notched gains against the Australian dollar.
    The number of Americans filing new claims for jobless
benefits dropped more than expected last week to its lowest
level in four months, a possible sign that hiring in the economy
of Canada's largest trading partner could pick up in July. 
    Meanwhile, Canadian wholesale trade grew by a
stronger-than-expected 2.3 percent in May from April, the
biggest monthly jump since January 2011, due mainly to higher
sales of fertilizer and food, Statistics Canada said on
Thursday. 
    While the data was supportive, currency traders remain
focused on possible plans by the Federal Reserve to move away
from ultra-loose monetary policy soon. The prospect of less
stimulus has boosted the U.S. dollar against a range of
currencies.
    "That's the default position at the moment; if there's no
news the (U.S.) dollar grinds up," said Adam Cole, global head
of currency strategy at Royal Bank of Canada. "And the Canadian
dollar has suffered least, as it generally does when markets are
dollar-directional."
    Fed Chairman Ben Bernanke is set to testify before U.S.
lawmakers again on Thursday following testimony on Wednesday.
 
    At 9:10 a.m. (1310 GMT) the Canadian dollar was
trading at C$1.0414 to the greenback, or 96.02 U.S. cents, the
exact level it closed at on Wednesday.
    Cole said the pair was unlikely to break out of the C$1.0350
to C$1.0450 range it has traded in for the past week.
    The price of Canadian government debt was mixed, but with
little price action. The two-year bond was off less
than a Canadian cent to yield 1.094 percent, while the benchmark
10-year bond was unchanged to yield 2.375 percent.