CANADA FX DEBT-C$ climbs on supportive economic outlook

Tue Mar 13, 2012 4:26pm EDT
 
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* C$ ends at C$0.9892 vs US$, or $1.0109

* Bond prices track Treasuries lower

By Claire Sibonney

TORONTO, March 13 (Reuters) - Canada's dollar climbed against the greenback in narrow and choppy trade on Tuesday after the Federal Reserve acknowledged recent signs of strength in the U.S. economy.

The Fed provided few clues on the prospects for further monetary easing in its policy statement, but offered a slight upgrade to its economic outlook while restating concerns about the high level of unemployment.

Reaction to the statement was wobbly, with no new signals for stimulus initially interpreted as U.S.-dollar positive, and negative for the Canadian dollar, which briefly touched a session low.

"I think that the market response is limited by the very nature of the Fed statement that brought forward limited changes," said Stewart Hall, senior currency strategist at RBC Capital Markets.

"I think expectations were already set pretty low going into this meeting, given the fact that there was no follow-up press conference and the expectation being for a more fulsome explanation of Fed sentiment coming in April."   Continued...