CANADA FX DEBT-C$ gains as U.S. Fed comments weaken greenback

Thu Jun 18, 2015 9:45am EDT
 
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* Canadian dollar at C$1.2142 or 82.36 U.S. cents
    * Bond prices mixed across the maturity curve

    TORONTO, June 18 (Reuters) - The Canadian dollar
strengthened further against a broadly weaker U.S. dollar on
Thursday as markets reacted to the Federal Reserve's
more-dovish-than-forecast comments about the expected pace of
policy tightening.
    The Fed is still expected to raise interest rates sometime
this year. It signaled on Wednesday, though, that increases
could start later than anticipated, with the U.S. economy
growing more slowly than previously forecast after contracting
in the first quarter.
    * At 9:05 a.m. EDT (1305 GMT), the Canadian dollar 
was at C$1.2142 to the greenback, or 82.36 U.S. cents, much
firmer than the Bank of Canada's Wednesday close of C$1.2236, or
81.73 U.S. cents.
    * The currency has traded between C$1.2127 and C$1.2238 so
far in the session.
    * The number of Americans filing new claims for unemployment
benefits fell more than expected last week, dropping 12,000 to a
seasonally adjusted 267,000, and pointed to a tightening labor
market. 
    * The U.S. consumer price index in May recorded its largest
increase in more than two years, rising 0.4 percent as gasoline
prices surged. Core CPI, which strips out food and energy costs,
increased 0.1 percent, the smallest rise since December. Core
CPI rose 1.7 percent in the 12 months through May. 
    * The Canadian dollar is expected to trade between C$1.2120
and C$1.2200 against the U.S. dollar during Thursday's North
American session, according to RBC Capital Markets.
    * Canadian government bond prices were mixed across the
maturity curve, with the shorter-term notes slightly higher. The
two-year was down 3 Canadian cents to yield 0.619
percent, and the benchmark 10-year was down 34
Canadian cents to yield 1.790 percent.

 (Reporting by Solarina Ho; Editing by Lisa Von Ahn)