CANADA FX DEBT-C$ steadies ahead of month's end

Wed Mar 28, 2012 9:05am EDT
 
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* C$ at C$0.9965 vs US$, or $1.0034
    * Bond prices mostly lower

    By Jon Cook	
    TORONTO, March 28 (Reuters) - Canada's resource-heavy
currency was little changed against the U.S. dollar on Wednesday
as investors processed the latest remarks from U.S. Federal
Reserve Chairman Ben Bernanke and positioned their portfolios
before the end of the month.	
    Bernanke said on Tuesday it was too soon to declare victory
in the U.S. economic recovery, warning against complacency in
policy-making as the outlook brightens. His dovish-sounding
comments knocked the U.S. dollar as they raised expectations for
another round of monetary stimulus. 	
    "It was more of a boost for equity markets than anything in
the currency world," said Shane Enright, executive director of
foreign exchange trading at CIBC World Markets.	
    "Canada is very comfortable between C$0.9850 (US$ 1.0150)
and C$1.0050 (99.50 U.S. cents) and we're right in the middle of
that right now."	
    At 8:50 a.m. (1250 GMT), the Canadian dollar stood
at C$0.9965 versus the U.S. currency, or $1.0034, down slightly
from Tuesday's close at C$0.9949 versus the greenback, or
$1.0051. 	
    Enright said growth-reliant currencies like Canada's have
been hurt by recent soft data on Chinese manufacturing and a
reduction in the annual economic growth outlook to below 8
percent by the world's top commodities consumer.	
    "You're seeing a little bit of weakening for Canada against
the European currencies as commodity currencies fall out of
vogue," he said.	
    The quiet session had dealers eyeing U.S. durable goods data
on Wednesday that showed orders rose 2.2 percent last month,
below expectations of a 3.0 percent increase. 	
    A drop in Brent crude oil prices, which fell 1 percent to
$124.27 a barrel, also dragged on the Canadian dollar. 	
    Across the Atlantic, European debt fears showed signs of
resurgence as Spain and the European Commission denied media
reports on Tuesday that Brussels had told the Madrid government
to take a bailout to refinance the country's troubled banks.
 	
    Euro zone debt concerns have abated recently with the latest
injection of cheap liquidity by the European Central Bank and
Greece having avoided a chaotic default.	
    Canadian bond prices were mostly lower, reflecting some risk
aversion by investors. Canada's two-year bond dipped
2 Canadian cents to yield 1.222 percent. The 10-year bond
 fell 10 Canadian cents to yield 2.138 percent.