CANADA FX DEBT-C$ steady near one-month high

Wed Jul 24, 2013 10:17am EDT
 
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* C$ at C$1.0276 to US$, or 97.31 U.S. cents
    * Holding near one-month high as retail boost lingers
    * Bond prices mixed

    By Andrea Hopkins
    TORONTO, July 24 (Reuters) - The Canadian dollar clung close
to a one-month high against the U.S. dollar on Wednesday,
supported by data this week showing stronger-than-expected
domestic retail sales in May, but with its upside limited by
more signals of a slowing Chinese economy. 
    Evidence of growth in the euro zone and strong smartphone
sales by technology giant Apple lifted European shares and the
euro, offsetting a survey of China's vast manufacturing sector
that found activity slowed to an 11-month low in July,
suggesting the economy was still losing momentum. 
    While Canada's currency tracked the euro briefly higher in
early trade, renewed worries over China then hit emerging market
shares and commodity-linked currencies such as the Canadian
dollar, limiting gains.    
    Tuesday's stellar Canadian retail sales data for May, which
came in about five times stronger than expected and boosted
growth expectations for the economy, was credited with putting
the currency on stronger footing.
    "The better-than-expected retail sales data built momentum
.... and what was support is now resistance in dollar-Canada, at
the C$1.0315-C$1.0320 level," said Jack Spitz, managing director
of foreign exchange at National Bank Financial.
    At 9:46 a.m. (1346 GMT) the Canadian dollar was
trading at C$1.0276 to the U.S. dollar, or 97.31 U.S. cents,
little changed from Tuesday's North American session close of
C$1.0285, or 97.23 U.S. cents.
    The currency's early-day strengthening to C$1.0262 was its
highest level since June 19, before U.S. Federal Reserve
Chairman Ben Bernanke expressed optimism about the U.S. economy.
His remarks pulled the Canadian currency broadly lower until
Tuesday's buoyant retail sales data bolstered hopes for Canadian
growth.
    "We've cleared an important pivot or momentum level and
we've cleaned out some of the corporate order bids down to where
we see fairly significant support at (the 100-day moving
average) C$1.0268," Spitz said. "We dipped a toe under it this
morning but not for any significant amount of time."    
    Higher auto sales helped drive Canadian retail sales 1.9
percent higher in May from April, the biggest monthly jump in 
more than three years and far greater than the 0.4 percent
growth predicted by analysts. 
    In the Canadian government debt market, the two-year bond
 was down 6.5 Canadian cents to yield 1.150 percent
and the benchmark 10-year bond shed 52 Canadian
cents to yield 2.471 percent.