CANADA FX DEBT-C$ marginally softer on post-Fed greenback rally, volatile oil

Tue Sep 22, 2015 4:33pm EDT
 
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(Updates with FX commentary, details, closing figures)
    * Canadian dollar at C$1.3258 or 75.43 U.S. cents
    * Bond prices higher across the maturity curve

    By Solarina Ho
    TORONTO, Sept 22 (Reuters) - The Canadian dollar softened
nominally against the greenback on Tuesday, as the U.S. dollar
firmed on expectations the Federal Reserve is still on track to
hike interest rates before next year and crude prices gave back
some of Monday's rally.
    Global oil demand worries, combined with excess supply,
continue to plague the commodity, with prices remaining
volatile. U.S. crude prices settled at $45.83 a barrel,
down 85 cents, or 1.82 percent, which was off session lows hit
earlier.
    The Fed held off hiking interest rates last week and scaled
back its forecasts for U.S. growth, but the U.S. dollar has
since rebounded as investors bet on a rise next month or in
December, particularly following comments from Atlanta Fed
President Dennis Lockhart. The move would also stand in contrast
to speculation the European Central Bank could ease further.
    The Canadian dollar ended at C$1.3258 to the
greenback, or 75.43 U.S. cents, weaker than the Bank of Canada's
official close of C$1.3245, or 75.50 U.S. cents.
    The currency traded between C$1.3220 and C$1.3298 during the
session.
    "The loonie's been pretty rangebound between C$1.30 and
C$1.33 for the most part, bouncing up and down, but relatively
content within that range," said Rahim Madhavji, President at
KnightsbridgeFX.com, noting the lack of domestic catalysts to
budge the currency.
    "The key catalyst in the short term for the loonie continues
to remain the Fed, and I don't think we're going to get any
clarity from that for maybe another month or so."
    Canadian retail sales data for July are due at 8:30 a.m. EDT
on Wednesday and will be the primary piece of domestic data for
markets to digest this week. Economists polled by Reuters are
expecting a rise of 0.5 percent. 
    Canadian government bond prices were mostly higher across
the maturity curve, with the two-year price up 3.5
Canadian cents to yield 0.501 percent and the benchmark 10-year
 rising 57 Canadian cents to yield 1.480 percent.
    The Canada-U.S. two-year bond spread narrowed to -17.7 basis
points, while the 10-year spread narrowed to -65.5 basis points.

 (Reporting by Solarina Ho; Editing by Nick Zieminski and Diane
Craft)