CANADA FX DEBT-C$ rises on weak dollar, firm oil

Thu Apr 12, 2012 8:31am EDT
 
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* C$ higher at C$0.9982 vs US$, or $1.0018
    * Market awaits Canada trade data, U.S. jobs data
    * Bond prices ease across curve

    By Jennifer Kwan	
    TORONTO, April 12 (Reuters) - The Canadian dollar climbed
against its U.S. counterpart on Thursday, in tandem with moves
in the euro and other growth-linked currencies, and also got a
lift from higher oil prices.	
    At around 8:00 a.m.(1200 GMT), the Canadian dollar 
was at C$0.9982 versus the U.S. dollar, or $1.0018, up from
Wednesday's finish at C$1.0042 versus the U.S. dollar, or 99.58
U.S. cents.	
    The currency benefited from a mix of factors including a
weak greenback following comments on Wednesday from Janet
Yellen, vice chair of the U.S. Federal Reserve, said Camilla
Sutton, chief currency strategist as Scotia Capital.	
    Yellen said the Fed had a variety of options if it decided
to seek another round of asset purchases, and that easy monetary
policy was appropriate given high unemployment and the headwinds
facing the economy, as she left the door open to further action.
 	
    "If there's room for further quantitative easing that would
be loosening of monetary policy, which is in turn negative for
the U.S. dollar," said Sutton.	
    The euro and other growth-linked currencies gained on
Thursday, including the Australian dollar, which firmed on data
showing employment outpaced expectations.  	
    Also supporting Canada's currency was firm oil prices, said
Sutton. Brent crude oil steadied around $120 per barrel on
Thursday, supported by a weaker greenback and hopes of faster
economic growth, despite news of higher oil production by Saudi
Arabia and a fairly bearish report from the IEA energy advisory
body. 	
    Markets were awaiting domestic trade data, and will digest
U.S. data on the jobs market and producer prices for more
direction. 	
    For the most part, the currency shrugged off an Italian bond
auction where yields jumped to 3.89 percent, a rise of more than
one percentage point compared with a month ago, as budget
troubles in Spain and concerns over global growth prompted
investors to demand a higher return to buy Italy's paper.
 	
    Canadian government bond prices fell across the curve.
Canada's two-year bond sagged 2 Canadian cents to
yield 1.230 percent, while the 10-year bond fell 20
Canadian cents to yield 2.039 percent.