CANADA FX DEBT-C$ firms on Bernanke comments, German data

Mon Mar 26, 2012 9:15am EDT
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* C$ at C$0.9950 vs US$, or $1.0050
    * Fed comments, German data boost market
    * Bond prices lower across curve

    By Jon Cook	
    TORONTO, March 26 (Reuters) - The Canadian dollar firmed
against the U.S. currency on Monday, continuing to rebound after
touching a monthly low in the previous session and boosted by
comments from U.S Federal Reserve Chairman Ben Bernanke and
upbeat German data.	
    On Friday, the Canadian dollar hit a monthly low at C$1.0035
against the U.S. dollar, or 99.65 U.S. cents, as weak
manufacturing data in Europe and China heightened global growth
fears that pushed the resource-heavy currency through its
200-day moving average. However, by the end of the session
Canada's dollar was again stronger than par with the greenback.	
    "The rejection of the move through the 200-day moving
average, the fact we held below C$1.0050 and closed near the
lows suggests we may have put in a bit of a short-term top on
that move higher in the Canadian dollar," said Matt Perrier, a
director of foreign exchange sales at BMO Capital Markets.	
    At 8:25 a.m. (1325 GMT), the Canadian dollar was at
C$0.9950 versus its U.S. counterpart, or $1.0050, up from last
week's North American close at C$0.9987 against the U.S.
currency, or $1.0013.	
    Growth concerns ebbed Monday after the closely watched
German Ifo index bucked expectations and rose to its highest
level since July 2011, just days after data showed the first
contraction in German manufacturing this year. 	
    The market was also buoyed Monday after U.S. Federal Reserve
Chairman Ben Bernanke fueled hopes for more monetary easing
after warning the U.S. economy needs to grow more quickly. His
comments helped to weaken the U.S. dollar. 
    Investors also looked for positive signs from the U.S.
economy, where home sales data due later in the day was seen
rising 1 percent in February. Investors hoped the report would
make up for last week's disappointing data that showed new home
sales fell 1.6 percent.	
    Currency traders expected the Canadian dollar to hover
between C$0.9930 and break-even with the U.S. dollar.	
    U.S. bond yields have risen steadily for most of March as
the world's largest economy showed signs of improvement, lending
solid support to the dollar. The yield on U.S. 10-year notes
rose about two basis points to 2.25 percent on
    Canadian bond prices were lower across the curve, with the
two-year bond down 2 Canadian cents to yield 1.252
percent. The 10-year bond fell 18 Canadian cents to
yield 2.201 percent.