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

Mon Dec 29, 2014 4:36pm EST
 
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* Canadian dollar at C$1.1629 or 85.99 U.S. cents
    * Bond prices higher across the maturity curve

 (Adds quote; updates prices)
    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 as
it heads toward an early general election next month after
parliament rejected the prime minister's nominee for president,
casting some doubt on the country'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, the Greek concern has been fairly
localized," Smith said.
    The Canadian dollar ended the North American
session 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 8.8 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 will fall further in 2015.
    "The main themes of 2014 were oil, the economy and interest
rates and those are the main catalysts for the U.S.
dollar-Canadian dollar moving forward," said Rahim Madhavji,
president of KnightsbridgeFX.com in Toronto.
    Canadian government bond prices were higher across the
maturity curve, with the two-year up 4-1/2 Canadian
cents to yield 1.036 percent and the benchmark 10-year
 up 68 Canadian cents to yield 1.835 percent.

 (Editing by Andre Grenon)