CANADA FX DEBT-C$ slips on oil, U.S. data

Wed Mar 28, 2012 4:34pm EDT
 
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* C$ ends down at C$0.9979 vs US$, or $1.0021

* Bonds prices edge up across the curve

By Jon Cook

TORONTO, March 28 (Reuters) - Canada's resource-heavy dollar slid back toward parity with the U.S. currency on Wednesday as oil prices sank and unexpectedly weak U.S. data hinted that the American economic recovery may be less robust than anticipated.

Oil prices fell as U.S. crude inventories spiked and as prospects grew that the United States and some European nations might tap strategic reserves. U.S. futures retreated, down 2.2 percent near $105 a barrel.

A drop in gold and copper prices also helped weaken the Canadian dollar, which at one point fell back to exactly one-for-one footing with the greenback. The Canadian dollar also lost ground against the euro, but outperformed other commodity-linked currencies, namely the Australian and New Zealand dollars.

"We've been stuck in this range for a month and a bit, and we're testing the top end of it," said David Bradley, a director of foreign exchange trading at Scotia Capital.

The Canadian dollar recovered somewhat by the end of the North American session, closing at C $0.9979 v ersus the U.S. dollar, or $1 .0021, weaker than Tuesday's close at C$0.9949 versus the greenback, or $1.0051.   Continued...