CANADA FX DEBT-C$ flat; domestic retail sales weigh

Tue Apr 24, 2012 9:30am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* C$ at C$0.9910 vs US$, or $1.0091
    * Global stocks, commodities recover a bit
    * Canada retail sales dip in February
    * Bank of Canada in focus later Tuesday
    * Bond prices little changed across curve

    By Jennifer Kwan	
    TORONTO, April 24 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Tuesday, supported by
steady global equity and currency markets but weighed down by a
softer domestic retail sales report.	
    Disappointing car sales led to an unexpected 0.2 percent
fall in Canada's retail trade in February, the same month the
motor vehicle business actually boosted wholesale trade,
Statistics Canada said on Tuesday. 	
    Making for an even soggier reading, the volume of sales,
used in calculating real gross domestic product (GDP), slumped
by 0.6 percent from January. And January's retail sales gain was
revised down to 0.2 percent from 0.5 percent. 	
    "There's cause to believe that it was a bit premature to be
talking rate hikes in the current fragile environment, and a
weak retail sales print supports that thesis," said Derek Holt,
vice president of economics at Scotiabank.	
    "It's a bit disconcerting at this juncture."	
    At around 9:05 a.m. (1305 GMT), the Canadian dollar 
firmed to C$0.9910 against the greenback, or $1.0091, unchanged
from its North American finish on Monday.	
    Last week the Bank of Canada kept its key lending rate on
hold at 1 percent, but in a surprisingly hawkish tone signaled
to the market it may need to start raising interest rates, given
reduced slack in the economy. 	
    The Bank of Canada will again be in focus later Tuesday. 
Central Bank Governor Mark Carney will testify before a 
parliamentary committee, with many market watchers expecting him
to reiterate a more positive outlook for the economy.   	
    Currency moves mirrored the relatively flat performance in
global equity and currency markets. European shares and the euro
recovered slightly after government debt auctions saw good
demand. But the growing economic slump in the euro zone and
resistance to austerity kept safe-haven German bonds near record
lows. 	
    Canadian government bond prices were mixed with the 2-year
bond down 2 Canadian cents to yield 1.371 percent.
The benchmark 10-year bond edged 4 Canadian cents
higher to yield 2.045 percent.