CANADA FX DEBT-C$ hits record high vs euro, 10-yr yield at new low

Mon Jul 16, 2012 9:59am EDT
 
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* Canada dollar flat vs US dollar, hits record high vs euro
    * 10-year bond yields touch record low

    By Claire Sibonney
    TORONTO, July 16 (Reuters) - Canada's dollar recovered to a
session low against its U.S. counterpart on Monday and hit a
record high versus the euro amid mixed North American economic
data and continued uncertainty over Europe's bailout plans.
    Against the greenback, the Canada's currency 
retreated to C$1.0165, or 98.38 U.S. cents, after data showed
U.S. retail sales fell for a third straight month in June. The
Canadian dollar was still rangebound however, from around
C$1.0154, or 98.48 U.S. cents heading into the release.
 
    Against the euro, the Canadian dollar hit another
consecutive record high adding to its string of recent gains. It
advanced to C$1.2362, or 80.93 euro cents, its strongest level
against the common currency since it was created in January
1999.
    "Dollar/Canada has just been caught between general dollar
moves and cross-related support for the currency," said Matt
Perrier, director of foreign exchange sales at BMO Capital
Markets.
    Perrier put immediate U.S. dollar resistance around
C$1.0175-C$1.02. For the euro, he noted a healthy retracement
back to C$1.026-C$1.027.
    "On the downside, we're continuing to make new lows every
day so it's come a long way in a relatively short period of time
... so apart from a market being overextended, it is tough to
try and pick absolute lows here," said Perrier.
    At 9:32 a.m. (1332 GMT), the Canadian dollar stood at
C$1.0152 against the U.S. dollar, or 98.50 U.S. cents, little
changed from Friday's North American session close at C$1.0146
versus the greenback, or 98.56 U.S. cents.
    
    10-YEAR BOND YIELD AT RECORD LOW
    The Canadian dollar was supported by data that showed
foreigners acquired a record C$26.11 billion ($25.60 billion) of
Canadian securities in May, fueled by the largest bond purchases
in three years. 
    Canadian bond prices picked up across the curve on Monday,
adding to gains alongside Treasuries after the U.S. retail sales
drop. 
    The 10-year bond yield touched a record low at
1.611 percent. The two-year government bond yielded
around 0.960 percent.