CANADA FX DEBT-C$ steady as investors look ahead to Fed

Mon Jun 15, 2015 5:18pm EDT
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(Adds comments, closing figures)
    * Canadian dollar at C$1.2317 or 81.19 U.S. cents
    * Bond prices higher across the maturity curve

    OTTAWA, June 15 (Reuters) - The Canadian dollar was little
changed against the greenback on Monday as weak domestic
economic data was offset by softness in the greenback, while
market focus shifted to the U.S. Federal Reserve's policy
meeting this week.
    Canadian factory sales fell a much more-than-expected 2.1
percent in April due to lower sales of food and aerospace
products, data showed. It was the third decline in factory sales
in four months. 
    The U.S. dollar dipped as the euro erased earlier losses,
with calm returning to markets following initial shock over the
failure of debt negotiations on Sunday between Greece and its
    "The (currency) markets are pretty much ignoring the
headlines on Greece for now because you really don't know which
way things are going," said Benjamin Reitzes, senior economist
and foreign exchange strategist at BMO Capital Markets.
    The Canadian dollar closed at 1.2317 to the
greenback, or 81.19 U.S. cents, little changed from the Bank of
Canada's official close of C$1.2311, or 81.23 U.S. cents, on
    The currency traded between C$1.2301 and C$1.2361 during the
    The Fed is expected to leave interest rates unchanged this
week, but investors will look for a clear signal of when it will
start to raise rates from their current historic lows. Analysts
said markets may trade cautiously until the Fed's policy
statement on Wednesday. 
    The market expects the Canadian dollar to weaken amid a more
optimistic Fed tone, but Canadian data will also drive
    "If we get weak wholesale trade on Wednesday, and if retail
sales is weak, that will spur a little more talk of a potential
rate cut because you'll be tracking growth below what Bank of
Canada was looking at in April," Reitzes said.
    Canadian government bond prices were higher across the
maturity curve, with the two-year price up 5 Canadian
cents to yield 0.626 percent and the benchmark 10-year
 rising 35 Canadian cents to yield 1.769 percent.
    The Canada-U.S. two-year bond spread was -8 basis points,
while the 10-year spread was -58.9 basis points.

 (Reporting by Solarina Ho and Leah Schnurr; Additional
reporting by Alastair Sharp; Editing by Meredith Mazzilli and
Peter Galloway)