CANADA FX DEBT-C$ ticks higher; eyes on BoC, U.S. GDP

Fri Apr 27, 2012 8:26am EDT
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* C$ at C$0.9824 vs US$, or $1.0179
    * Markets to digest Bank of Canada comments; U.S. GDP
    * Bonds flat to softer across curve

    By Jennifer Kwan	
    TORONTO, April 27 (Reuters) - Canada's dollar edged higher
against its U.S. counterpart on Friday and was on track for its
best weekly gain since early March as investors were set to
digest more comments from the Bank of Canada.	
    Bank of Canada Governor Mark Carney is scheduled to deliver
a presentation on the economic outlook to an Ottawa business
audience on Friday morning, and traders and strategists will be
looking for any fresh clues on the timing of an interest rate
    The central bank surprised traders earlier this month by
suggesting that it was closer to raising interest rates as
economic conditions improve at home and abroad. It kept rates
steady at 1 percent, as expected, but signaled that it was
starting to think more seriously about tightening monetary
    "They've been pretty clear about what they intend to do. The
more they say it the sooner the market seems to expect it's
going to happen," said Shaun Osborne, chief currency strategist
at TD Securities.	
    "They've set out their intent. They just need the
justification from the numbers."	
    At around 8:10 a.m. (1210 GMT), the Canadian dollar 
was at C$0.9824 versus the U.S. currency, or $1.0179, slightly
higher from Thursday's finish at C$0.9840 versus the U.S.
currency, or $1.0163. 	
    Although the currency has been stuck in a tight range in
recent weeks it was on track to notch its best weekly gain since
early March.	
    Still, the currency's gains were vulnerable to broader moves
in global equities. Spanish and Italian borrowing rates nudged
higher on Friday after a two-notch downgrade of Spain's
sovereign credit rating, but world equity and currency markets
shrugged off the move and Italy managed to sell almost 6 billion
euros of new bonds. 	
    The picture appeared brighter in North America as U.S.
stocks eyed a fourth day of gains on Friday, helped by upbeat
corporate earnings. 	
    Osborne said strategists and traders would look to U.S.
growth data on Friday for more clues on the economic outlook.	
    In a potential wild card for markets, the first estimate of
U.S. first-quarter GDP is expected to show the economy expanded
at a 2.5 percent annual rate, a Reuters poll found, versus 3.0
percent in the fourth quarter. Investors have become cautious
after signs of a softening recovery. 	
    Canadian government bond prices were mostly flat to softer
across the curve. Canada's two-year bond sagged 1
Canadian cent to yield 1.381 percent, while the benchmark
10-year bond dropped 5 Canadian cents to yield 2.057