CANADA FX DEBT-C$ weakens after China data, eyes BoC statement
* C$ at C$0.9984 vs US$, or $1.0016 * China data, Spanish yields hurt sentiment * Traders look ahead to BoC statement on Apr 17 * Bond prices climb across curve By Jon Cook TORONTO, April 13 (Reuters) - The Canadian dollar slid against its U.S. counterpart on Friday as sluggish Chinese growth and Europe's lingering debt mess weakened risk sentiment, but hopes for a rosier outlook from the Bank of Canada next week boosted Canada's currency above other majors. The euro fell against the U.S. dollar for the second straight week as rising Spanish borrowing costs spooked investors. Global growth fears were compounded by data that showed China's economy grew less than expected in the first quarter. While nervous investors sought refuge in the U.S. dollar, Canada's currency outperformed the euro, sterling, Swiss franc and Australian dollar. "It's a decent performance given the risk aversion we've seen come back to the fore," said Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital. The Canadian dollar finished at C$0.9984 versus the U.S. dollar, or $1.0016, down from Thursday's North American finish at C$0.9945 versus the U.S. dollar, or $1.0055. It edged down 0.1 percent for the week. Canada's triple-A rated economy, underscored by last month's strong employment numbers and a continued hot housing market, has become increasingly attractive to foreign investors worried about volatility in Europe and slowing growth in China. Chandler said another factor keeping the Canadian dollar from weakening further was anticipation that the Bank of Canada would be "a bit more hawkish" in next week's rate statement and Monetary Policy Report. Bank of Canada's next policy announcement date is April 17. The next day it will offer detailed forecasts in its quarterly Monetary Policy Report, followed by a press conference by Governor Mark Carney. The median forecast in a Reuters poll of 40 economists and strategists shows the next interest rate hike will come in the second quarter of 2013. "No one expects any imminent signals of an immediate rate hike, but I think the tone has changed dramatically out of the Bank of Canada," said Firas Askari, head of foreign exchange trading at BMO Capital Markets. Higher interest rates or expectations of higher rates tend to help currencies strengthen by attracting international capital flows. The Canadian dollar was still seen trading within a narrow range of between C$0.99 and C$1.01 for the near term. Canadian government bond prices climbed across the curve, with Canada's two-year bond up 6 Canadian cents to yield 1.203 percent. The 10-year bond added 53 Canadian cents to yield 1.997 percent.
© Thomson Reuters 2016 All rights reserved.