CANADA FX DEBT-C$ sags on growth worries; Europe meeting eyed

Mon Jul 9, 2012 9:17am EDT
 
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* C$ slips to C$1.0213 vs US$, or 97.91 U.S. cents
    * Investors shun risk ahead of Europe ministers' meeting
    * Bonds edge up across the curve

    By Jennifer Kwan
    TORONTO, July 9 (Reuters) - The Canadian dollar stumbled
against the U.S. currency on Monday along with global stock
prices on doubt there would be progress at a meeting of finance
ministers about Europe's debt crisis.
    The euro hovered near a two-year low as investors shunned
riskier assets.  
    A meeting of euro zone finance chiefs later on Monday held
center stage, with doubts growing over whether they will make
much progress on plans for a single euro zone bank regulator, or
on how the region's new bailout fund can be used to reduce a
country's borrowing costs. 
    The meeting comes after the euro zone leaders in late June
agreed to let their rescue fund inject aid directly into
stricken banks from next year and intervene on bond markets to
support troubled member states.
    "They're big, important meetings and a follow on to the
summit," said Camilla Sutton, chief currency strategist at
Scotiabank.
    Investors are looking for policies that can actually be
implemented, added Sutton.
    At around 9:10 a.m. (1310 GMT), the Canadian currency
 was at C$1.0213 to the U.S. dollar, or 97.91 U.S.
cents, down slightly from Friday's finish at C$1.0186 versus the
U.S. dollar, or 98.17 U.S. cents.
    Also weighing on the currency was weaker-than-expected
Chinese inflation data and a record fall in Japan's machinery
goods orders, which help gauge the strength of capital spending.
That followed a disappointingly weak U.S. jobs report on Friday.
    Canadian bond prices edged up across the curve with the
two-year government bond up 4 Canadian cents to yield
0.962 percent, while the benchmark 10-year bond 
added 26 Canadian cents to yield 1.662 percent.