CANADA FX DEBT-C$ steady as markets await Fed decision

Tue Jun 16, 2015 4:44pm EDT
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(Adds strategist comment, closing figures, details)
    * Canadian dollar at C$1.2312 or 81.22 U.S. cents
    * Bond prices higher across the maturity curve

    By Solarina Ho
    TORONTO, June 16 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Tuesday as a stronger
greenback, bolstered in part by supportive housing-related data,
offset a rise in U.S. crude prices, while overall trading was
extremely range-bound.
    U.S. housing starts fell last month after a hefty increase
the prior month, but a surge in permits for future construction
to a near eight-year high signaled underlying strength in the
market, which has seen prices and sales rising.
    The data comes as Federal Reserve officials are gathered for
a policy meeting that ends tomorrow. Investors have been
shifting their focus toward the Fed and how it views the latest
round of economic data. The U.S. central bank is widely expected
to resume raising interest rates sometime this year, but markets
are looking for clues on whether it will come sooner or later.
    "I don't think the Fed's going to do anything until later
this year," said David Bradley, a director of foreign exchange
trading at Scotiabank, adding that he expects the Canadian
dollar to trade between C$1.1950 and C$1.26 over the coming
weeks and months.
    "I don't see anything imminent that will take us out of the
currency range."
    The Canadian dollar finished the session at
C$1.2312 to the greenback, or 81.22 U.S. cents, not far off the
Bank of Canada's official close of C$1.2317, or 81.19 U.S.
cents. The currency traded between C$1.2302 and C$1.2347 during
the session.
    U.S. crude oil prices edged up, supported by a tropical
storm that was moving ashore in the oil-producing state of
Texas, but a global supply glut limited gains and put Brent
under pressure. U.S. crude settled up 45 cents to $59.97
a barrel, while Brent crude lost 25 cents to $63.70.
    U.S. housing data showed groundbreaking dropped 11.1 percent
to a seasonally adjusted annual pace of 1.04 million units,
while permits for future home building increased 11.8 percent to
a 1.28 million-unit rate, the highest since August 2007.
    Domestically, foreign investors bought Canadian securities
for the fourth straight month in April, snapping up C$12.94
billion to set a record high for the opening four months of a
    Canadian wholesale trade data for April is due at 8:30 a.m.
EDT (1230 GMT) on Wednesday, followed by the Fed's rate decision
at 2:00 p.m. (1800 GMT).
    Canadian government bond prices were higher across the
maturity curve, with the two-year price up 3 Canadian
cents to yield 0.609 percent and the benchmark 10-year
 up 25 Canadian cents to yield 1.740 percent.
    The Canada-U.S. two-year bond spread was -8.5 basis points,
while the 10-year spread was -56.9 basis points.

 (Reporting by Solarina Ho; Editing by Meredith Mazzilli and
James Dalgleish)