CANADA FX DEBT-C$ steady after Canadian CPI data slightly weaker

Fri Apr 19, 2013 9:29am EDT
 
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* C$ at C$1.0254 vs US$, or 97.52 U.S. cents
    * March inflation slowed to 1.0 pct from 1.2 pct in Feb
    * Bond prices mixed

    By Solarina Ho
    TORONTO, April 19 (Reuters) - The Canadian dollar held
steady against its U.S. counterpart on Friday, as domestic March
inflation data weakened from February and with little other
economic news to drive the currency.
    The annual inflation rate last month slowed to 1.0 percent
from 1.2 percent in February, further underlining how little
pressure there is on the Bank of Canada to raise rates any time
soon. 
    "After quite a bit of volatility in the prior few months,
Canadian inflation has shown its true colors a little more
clearly this month - and those colors are pretty bland. For a
change there wasn't a big surprise," said Doug Porter, chief
economist at BMO Capital Markets.
    Overnight index swaps, which trade based on expectations for
the central bank's key policy rate, showed that after the
announcement traders trimmed their very small bets on an
interest rate cut later this year. 
    At 9:02 a.m. (1302 GMT), the Canadian dollar was trading at
C$1.0254 versus the U.S. dollar, or 97.52 U.S. cents, little
changed from Thursday's North American close at C$1.0260, or
97.47 U.S. cents.
    After a volatile week that saw the currency weaken more than
1 percent, it was trading between a narrow band of C$1.0233 and
C$1.0266 on Friday, and underperforming against most other
currencies.
    Canadian government bond prices were mixed, with the
two-year bond unchanged with a yield of 0.940
percent, while the benchmark 10-year bond shed 2
Canadian cents to yield 1.708 percent.