CANADA FX DEBT-C$ eases as U.S. crude slips, traders trim positions
* Canadian dollar at C$1.2170 or 82.17 U.S. cents * Bond prices higher across the maturity curve By Solarina Ho TORONTO, April 24 (Reuters) - The Canadian dollar retreated against the U.S. dollar on Friday, as weaker U.S. crude oil prices weighed and short-term speculators exiting their positions head of the weekend. U.S. oil prices diverged from Brent prices on Friday, falling more than 1 percent on worries of another increase in crude stockpiles next week, even as overall demand appeared to be picking up ahead of summer. Crude, a key Canadian export, gained on the week, however, with U.S. prices rising some 2.5 percent. Short-term currency speculators, many of whom are London-based, were also unloading their positions. This added to the Canadian currency's retreat, which began Friday morning, during the North American session. "That was exactly when we saw the move; it's the classic 'London go home' period," said Greg Anderson, global head of foreign exchange strategy with BMO Capital Markets in New York. "I think that group would probably be somewhat inclined to come back in and buy CAD and sell USD on Monday, unless oil prices fall substantially further." The Canadian dollar finished at C$1.2170 to the greenback, or 82.17 U.S. cents, weaker than the Bank of Canada's official Thursday close of C$1.2146, or 82.33 U.S. cents. The currency, which traded between $1.2103 and C$1.2182 on Friday, was also weaker against all of its other major counterparts. It was about half a percent stronger on the week. The currency's strength earlier in the session was helped by a generally softer U.S. dollar. The greenback, already pressured by weak new home sales data for March, a rise in U.S. jobless claims and subdued factory activity earlier this week, wilted against a basket of currencies on Friday. U.S. durable goods orders in March, which painted a mixed picture of sluggish growth and could prompt the Federal Reserve to hold off hiking interest rates, added to the greenback's weakness. A Federal Reserve meeting next week will be a key market driver as investors await clues on when the U.S. central bank will begin hiking rates. Speculation of a June move has already shifted towards September due to the spate of lukewarm U.S. economic data from the first quarter. Canadian government bond prices were higher across the maturity curve, with the two-year price up 4 Canadian cents to yield 0.632 percent and the benchmark 10-year rising 39 Canadian cents to yield 1.442 percent. The Canada-U.S. two-year bond spread was 12.4 basis points, while the 10-year spread was -47.0. (Reporting by Solarina Ho; Editing by Nick Zieminski and James Dalgleish)
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