CANADA FX DEBT-C$ firms on German sentiment, Fed hopes

Tue Mar 13, 2012 8:29am EDT
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* C$ at C$0.9908 vs US$, or $1.0093

* German sentiment at highest since July 2010

* Bond prices lower across the curve

By Jon Cook

TORONTO, March 13 (Reuters) - Canada's dollar advanced against the U.S. currency on Tuesday after a European economic think tank said there was "no chance" of a German recession and on expectations there will be no fresh stimulus moves by the U.S. Federal Reserve later in the day.

The ZEW survey for March showed German analyst and investor sentiment rising significantly more than expected to its highest level since June 2010. ZEW economist Michael Schroeder said the boost was due to optimism over Greece's debt deal and the feeling that the worst for Europe's banking sector was over.

"Sentiment overnight has been a touch better than yesterday," said Charles St-Arnaud, Canadian economist and currency strategist at Nomura Securities International in New York.

At 8:12 a.m. (1212 GMT), the Canadian dollar stood at C$0.9908 versus the U.S. dollar, or $1.0093, up from Monday's North American session close at C$0.9927 versus the U.S. dollar, or $1.0074.

In addition, the Federal Reserve is expected to hold steady on monetary policy when it concludes its one-day meeting on Tuesday, acknowledging a mildly brighter economic outlook while refraining from any suggestion that further easing is now off the table.   Continued...