CANADA FX DEBT-C$ at 1-week low on global growth fears

Tue Mar 6, 2012 9:24am EST
 
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* C$ hits at C$1.0018 vs US$, or 99.82 U.S. cents
    * Bond prices track Treasuries higher

    By Claire Sibonney	
    TORONTO, March 6 (Reuters) - Canada's dollar eased for
a third straight session to more than a one-week low against the
greenback on Tuesday, following direction in
commodity prices and other riskier assets on concern that the
global growth outlook once again is darkening.	
    China's lowering of its economic growth target and data
pointing to Europe possibly slipping back into recession have
slowly eroded the optimism on global markets generated by the
European Central Bank's huge injection of loans to banks since
December.	
    Fears have also heightened again over whether Greece will
successfully complete a private sector debt swap by late
Thursday to release a 130-billion-euro second bailout and meet
bond repayments due by March 20 which would avoid a messy
default. 	
    "The Canadian dollar is still being traded off the back of
global macroeconomic issues, particularly Europe, Greece and
yesterday's China story," said Michael O'Neill, vice-president
of foreign exchange trading at RJOFX Canada.	
    At 9:14 a.m. (1414 GMT), the Canadian dollar stood
at C$1.0015 against the U.S. dollar, or 99.85 U.S. cents, down
from Monday's North American session close at C$0.9942 versus
the U.S. dollar, or $1.0058. Earlier, it weakened to C$1.0018 or
99.82 U.S. cents, its softest level since Feb. 27.	
    Ivey PMI data due at 10:00 a.m. may drive further weakness
for the currency if it falls below expectations.	
    After a strong performance last week, O'Neill said the
Canadian dollar continues to grind higher within the confines of
a steady U.S. dollar downtrend channel between C$0.9800-1.0060.	
    "The Canadian dollar is in its nice little (uptrend) channel
with lots of room to bounce around inside it," he added.	
    Canadian bond prices tracked U.S. Treasuries higher amid the
risk-off tone in markets. 	
    Canada's two-year bond was up 3 Canadian cents to
yield 1.104 percent. The 10-year bond climbed 29
Canadian cents to yield 1.946 percent.