CANADA FX DEBT-C$ hit with commodity cousins on China news

Mon Mar 5, 2012 4:59pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* C$ ends lower at C$0.9942 vs US$, or $1.0058

* Bond prices track US Treasuries down

By Claire Sibonney

TORONTO, March 5 (Reuters) - Canada's dollar retreated against the U.S. dollar on Monday as commodity-linked currencies weakened after China announced its lowest annual growth target in eight years, sparking concern about demand for resources such as oil and base metals.

Oil prices were tugged in both directions, initially falling on the Chinese data, but later bouncing back on supply risks and tensions over Iran's nuclear program.

Copper lost more than 1 percent of its value on the downbeat news from the world's largest buyer of industrial metals.

"It's a classic flow into U.S. dollars and Japanese yen, largely triggered by the news overnight that China was downgrading their growth target for the year," said David Tulk, chief Canada macro strategist at TD Securities.

"But as the day wore on, it seemed to be more just a flight out of commodity currencies ... those that have continued to lag are the New Zealand, Australian, Canadian dollars as well as the Norwegian krone. So it's more of that kind of day where the idea that maybe China grows at a slower rate hurts commodity demand and by association, commodity currencies."

The Canadian dollar ended the North American session at C$0.9942 versus the U.S. dollar, or $1.0058, down from Friday's close at C$0.9886 versus the U.S. dollar, or $1.0115.   Continued...