CANADA FX DEBT-C$ slips with crude, Fed minutes soothes fears

Wed Feb 18, 2015 4:48pm EST
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(Adds analyst comment, Fed minutes, updates prices to close)
    * Canadian dollar ends at C$1.2418, or 80.53 U.S. cents
    * Bond prices higher across the maturity curve

    By Solarina Ho
    TORONTO, Feb 18 (Reuters) - The Canadian dollar softened
against the greenback on Wednesday as crude prices fell, but
losses were tempered after minutes from the latest Federal
Reserve meeting showed policymakers were worried about hiking
interest rates too soon.
    Crude prices have jumped 35 percent from multi-year lows
over the past month, after a slump that has hurt the currency of
Canada, a major producer. With oil retreating Wednesday, the
domestic currency struggled. 
    "If you're trading the loonie, you can not get away from the
violent ebb and flow of the oil trade," said Adam Button,
currency analyst at ForexLive in Montreal, referring to the
currency by a colloquial term for the water bird featured on its
dollar coin.
    The slump in oil offset the Fed news, which weighed on the
greenback across the board. 
    "The Canadian dollar has benefited less than it would have
if not for a nearly $2 fall in oil prices," Button said.
    The Canadian dollar ended the day at C$1.2418 to
the greenback, or 80.53 U.S. cents, weaker than Tuesday's close
of C$1.2374, or 80.81 U.S. cents.
    Markets also digested a flurry of data, mostly out of the
U.S., including figures that showed plunging crude prices were
keeping a lid on inflation, which could argue against an
interest rate hike by the Fed. 
    U.S. housing starts fell in January as ground breaking for
single-family projects slipped off a 6-1/2 year high.
    In Canada, wholesale trade jumped a more-than-expected 2.5
percent to C$55.4 billion in December on widespread gains across
the sectors. 
    Canadian government bond prices were higher across the
maturity curve, with the two-year up 5 Canadian cents
to yield 0.431 percent and the benchmark 10-year 
gaining 29 Canadian cents to yield 1.476 percent.

 (Additional reporting and writing by Alastair Sharp; Editing by
Meredith Mazzilli and Cynthia Osterman)