CANADA FX-C$ little changed ahead of BoC meeting

Mon Apr 16, 2012 8:55am EDT
 
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* C$ at C$0.9987 vs US$, or $1.0013
    * Higher Spanish bond yields hurt euro
    * Traders look ahead to BoC statement on Apr 17

    By Jon Cook	
    TORONTO, April 16 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Monday as Spain's rising
debt yields sparked concern about the euro zone economy, but
hopes for a rosier outlook from the Bank of Canada boosted
Canada's currency above other majors.	
    Sentiment was cautious across financial markets as Spanish
10-year government bond yields rose above 6 percent for the
first time this year and the cost of insuring its debt hit a
record high.  	
    The euro fell to its lowest in two months, as selling by
some Asian investors picked up early in the European session. 	
    "The Canadian dollar is holding in relatively well
independently," said Jeremy Stretch, head of foreign exchange
strategy for CIBC World Markets in London.	
    "There's a case to be made that the underlying fundamentals
remain pretty robust and so on a relative basis Canada looks
good against the euro, partly because of the euro woes based
around Spain."	
    At 8:45 a.m. (1245 GMT), the Canadian dollar was at
C$0.9987 versus the U.S. dollar, or $1.0013, little changed from
Friday's North American close at C$0.9984 versus the U.S.
dollar, or $1.0016. It touched an overnight session high of
C$0.9981 against the greenback.	
    News over the weekend that China had doubled the yuan's
daily trading band against the U.S. dollar to 1 percent had
limited impact on major currencies.	
    Oil and metals prices were suffering from the worries about
Spain, but were also hit by the signs of slowing demand from
China and fears U.S. consumer demand was being hurt by high
gasoline prices.  	
    The Canadian currency shrugged off the broader dip in
commodities as traders focused on Tuesday's policy announcement
from the Bank of Canada. 	
    "It's a case where markets are mindful of the Bank of Canada
and what they may say tomorrow, which should be reasonably
supportive for the currency," said Stretch, who saw the Canadian
dollar making further gains against the euro and the Australian
dollar.