CANADA FX DEBT-C$ lackluster vs US$ as focus shifts to euro, yen

Tue Jan 15, 2013 4:46pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* C$ ends at C$0.9841 vs US$, or $1.0162
    * Bond prices rise across the curve

    By Claire Sibonney
    TORONTO, Jan 15 (Reuters) - The Canadian dollar ended little
changed against the greenback on Tuesday after Wall Street
stocks clawed back earlier losses, but the currency outperformed
the euro and fell against the yen in more volatile trading on
the crosses.
    The euro dropped sharply against both the dollar and yen in
mid-afternoon action with traders citing a news report quoting
Eurogroup head Jean-Claude Juncker as saying that the single
currency's exchange rate was "dangerously high". 
    Meanwhile, the yen was on track for its biggest one-day gain
against the greenback in eight months as a warning from a
Japanese minister about the disadvantages of excessive yen
weakness prompted investors to pare back bearish bets.
    "Really it continues to be about the yen and the euro on the
crosses," said Matt Perrier, a director of foreign exchange
sales at BMO Capital Markets. "Dollar/Canada has been stuck
within the same range for the last two weeks between C$0.9815
and C$0.9885 and we're smack dab in the middle of it. 
    "We've seen some fairly big moves by the rest of the G10
currencies against the U.S. dollar."
    The Canadian dollar ended the North American
session at C$0.9841 versus the U.S. dollar, or $1.0162, weaker
than Monday's close at C$0.9838 versus the greenback, or
$1.0165. It recovered from a bigger loss earlier in the day as
U.S. stock markets edged higher on stronger-than-expected U.S.
retail data. 
    The Canadian currency advanced slightly against the euro
 and weakened off against the yen.
    Later this week, the Canadian dollar is expected to take
more direction from U.S. earnings and the U.S. debt ceiling
    President Barack Obama on Monday rejected any negotiations
with Republicans over raising the U.S. debt ceiling. The United
States could default on its debt if Congress does not increase
the government's borrowing limit.
    On the earnings front, reports are due this week from
Goldman Sachs, Bank of America, Intel 
and General Electric, among other companies.
Third-quarter reports ended with an overall profit gain of just
0.1 percent, the worst for an S&P 500 profit period in three
years, according to Thomson Reuters data. 
    Analyst estimates for the fourth quarter have fallen sharply
since October. S&P 500 earnings growth is now seen up just 1.9
percent from a year earlier, according to Thomson Reuters data.
    Adam Cole, global head of FX strategy at RBC Capital Markets
in London, said that direction from global equities "will be put
to the test more harshly" on Wednesday when there will be a
spate of earnings reports. 
    Canadian bond prices edged higher across the curve,
following U.S. Treasuries up as traders turned their focus to
the federal debt ceiling, stoking bids for government debt
despite the risk of a federal default. 
    Canada's two-year bond was up 3 Canadian cents to
yield 1.181 percent, while the benchmark 10-year bond
 climbed 25 Canadian cents to yield 1.912 percent.