CANADA FX DEBT-C$ ekes minor gains ahead of event risks

Mon Aug 20, 2012 4:38pm EDT
 
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* C$ at C$0.9884 versus $US, or $1.0117
    * Market pauses ahead of key data, policy news
    * Bond prices mixed, two-year bond higher

    By Solarina Ho
    TORONTO, Aug 20 (Reuters) - The Canadian dollar ticked
moderately higher against the U.S. dollar on Monday, but with
volumes light, the market remained mostly in a holding pattern
ahead of key data and policy news later in the week and beyond.
    "There's a lot of tier-one event risks that have the ability
to push the markets around fairly significantly, so the market
does take a breather from time to time. Today is one of those
days," said Jack Spitz, managing director of foreign exchange at
National Bank Financial, noting there was little in terms of
volume in the market or trading range on funds and most currency
pairs.
    Canada's dollar closed at C$0.9884 versus the greenback, or
$1.0117, slightly firmer than Friday's close at C$0.9891 to the
U.S. dollar, or $1.0110.
    "There's a fairly sideways but slow grind to the left,
toward the next level of important support in USD/CAD which is
at the calendar low of C$0.98," said Spitz.
    Wednesday's Canadian retail sales data, comments from Bank
of Canada's Mark Carney when he speaks to the Canadian Auto
Workers union and the Federal Reserve's FOMC minutes could all
be factors in the currency's direction. Market watchers will
look closely for any change in the Canadian central bank's
hawkish tone.
    Fed Chairman Ben Bernanke's speech in Jackson Hole, Wyoming,
on Aug. 31 will kick off the market-moving "tier-one" events. On
the domestic front, all eyes will also be on the Bank of Canada
policy decision and the Quebec election.
    "There's a veritable plethora of market risks and economic
news and policy decision that are going to be made that are
going to be of great influence to the markets," said Spitz.
    Canadian bond prices were mixed. The two-year bond
 was up 0.5 Canadian cents, yielding 1.192 percent,
and the benchmark 10-year bond rose 4.5 Canadian
cents, yielding 1.941 percent.