CANADA FX DEBT-C$ firms as investors position ahead of Fed minutes, data
(Adds strategist comment, details, closing figures) * Canadian dollar ends at C$1.3056 or 76.59 U.S. cents * Bond prices mostly lower across the maturity curve By Solarina Ho TORONTO, Aug 18 (Reuters) - The Canadian dollar drifted higher against its U.S. counterpart on Tuesday as market participants positioned themselves ahead of the release of minutes of the Federal Reserve's latest policy meeting and domestic economic data at the end of the week. The Fed minutes are set for release on Wednesday and investors will be parsing for clues on how soon the U.S. central bank will raise interest rates. Many expect a move this year, possibly as early as September. "I don't think the market is looking for the Fed to be too aggressive tomorrow. They'll probably stay the course and buy themselves the option to see a couple of more numbers," said Darcy Browne, managing director, foreign exchange sales at CIBC World Markets. "For the short term, it looks like in the absence of anything else, positioning is probably the most important thing." The Canadian dollar, which was stronger than many of its counterparts, finished at C$1.3056 to the greenback, or 76.59 U.S. cents, firmer than the Bank of Canada's official close of C$1.3085, or 76.42 U.S. cents, on Monday. The currency was range-bound, trading between C$1.3040 and C$1.3126. Browne still expects the loonie to weaken over the medium to longer term, trading between C$1.33 to C$1.35 in the coming months. The price of oil, a major Canadian export, stayed near 6-1/2-year lows but settled up 1.8 percent above $42 a barrel, which also helped the loonie's modest lift. Investors are also awaiting Canadian inflation and retail sales data due on Friday. Canadian government bond prices were mostly lower across the maturity curve, with the two-year off 2 Canadian cents to yield 0.417 percent and the benchmark 10-year sliding 25 Canadian cents to yield 1.398 percent. The Canada-U.S. two-year bond spread widened to -30.5 basis points, while the 10-year spread widened to -79.6 basis points. (Reporting by Solarina Ho; Editing by Peter Galloway and James Dalgleish)
© Thomson Reuters 2017 All rights reserved.