CANADA FX DEBT-C$ little changed as rough 2014 winds down

Mon Dec 29, 2014 9:41am EST
 
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* Canadian dollar at C$1.1629 or 85.99 U.S. cents
    * Bond prices higher across the maturity curve

    By Leah Schnurr
    OTTAWA, Dec 29 (Reuters) - The Canadian dollar was little
changed against the greenback on Monday and was expected to
trade in a tight range this week, with the currency on track to
close out its worst year since 2008.
    Investors were keeping an eye on developments in Greece
after the country's prime minister announced plans for an early
general election next month, casting some doubt on Greece's
international bailout. 
    While the events did not spark much reaction in the loonie,
markets could see some increased risk aversion next week when
trading desks are fully staffed and as the Greek election draws
nearer, said Scott Smith, senior market analyst at Cambridge
Mercantile Group in Calgary.
    "As of right now right now, the Greek concern has been
fairly localized," said Smith.
    The Canadian dollar was at C$1.1629 to the
greenback, or 85.99 U.S. cents, slightly weaker than last
Wednesday's official Bank of Canada close of C$1.1623, or 86.04
U.S. cents. Markets were closed at the end of last week for the
Christmas and Boxing Day holidays.
    The currency is likely to stick to a range between the high
C$1.15s and high C$1.16s this week, said Smith.
    The Canadian dollar is down 8.6 percent for 2014, its
weakest performance since 2008, which was the onset of the
global financial crisis.
    Diverging monetary policy between Canada and the United
States, lackluster domestic economic growth and a plunge in oil
prices have all weighed heavily on the currency. Analysts expect
it has further to fall in 2015.
    "It's been a fairly significant year so far in U.S.
dollar-Canadian dollar, and I think traders now are just looking
for the next move higher," said Smith.
    Canadian government bond prices were higher across the
maturity curve, with the two-year up 3-1/5 Canadian
cents to yield 1.041 percent and the benchmark 10-year
 up 53 Canadian cents to yield 1.852 percent.












 (Editing by Meredith Mazzilli)