CANADA FX DEBT-C$ up on U.S. earnings, better Europe mood

Wed Apr 25, 2012 8:23am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* C$ at C$0.9859 to the US$, or $1.0143
    * Market awaits U.S. Fed, Bank of Canada
    * Bonds ease across curve

    By Jennifer Kwan	
    TORONTO, April 25 (Reuters) - Canada's dollar rose against
its U.S. counterpart on Wednesday, amid rosier U.S. corporate
earnings and signs of improving investor sentiment about the
euro zone debt market.	
    The currency took its cue from the euro and global stock
markets, which advanced after forecast-beating results from
Apple Inc boosted optimism in a corporate earnings
season already outstripping expectations by a wide margin. 
 	
    "The No. 1 thing was Apple. That certainly spurred the
market into a risk-on mode, helping Canada this morning," said
Steve Butler, managing director of foreign exchange trading at
Scotiabank.	
    Also contributing to the market mood for riskier assets was
weaker demand at a German auction of new 30-year bonds. The
ultra low yielding but safe paper seemed to be much less
attractive to investors. 	
    At 7:45 a.m. (1145 GMT), the Canadian dollar was at
C$0.9859 against the U.S. dollar, or $1.0143, up from its
Tuesday's finish at C$0.9880 against the U.S. dollar, or
$1.0121. 	
    The key domestic event on Wednesday will be Bank of Canada
Governor Mark Carney discussing the Monetary Policy Report
before the Senate Standing Committee on Banking after the
market's close. That follows his comments on Tuesday before the
House of Commons finance committee.	
    Markets will also digest a key policy statement by the U.S.
Federal Reserve, and peruse it for clues on whether there may be
more monetary policy easing. 	
    Carney had reiterated to the finance committee that the
central bank might have to increase interest rates because of
the stronger performance of the economy and firmer underlying
inflation. 	
    Last week, the Bank of Canada kept its key lending rate on
hold at 1 percent, but in a surprisingly hawkish tone, signaled
it may need to start raising interest rates, given the improving
economy.  	
    Canadian government bond prices were mostly lower with the
two-year bond down 5 Canadian cents to yield 1.444
percent. The benchmark 10-year bond sank 10 Canadian
cents to yield 2.084 percent.