CANADA FX DEBT-C$ weakens slightly, pressured by overseas data

Tue Apr 23, 2013 8:21am EDT
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* C$ at C$1.0276 vs US$, or 97.31 U.S. cents
    * German and Chinese data sparks concerns about global
    * Canadian retail sales data expected at 8:30 a.m.
    * Bond prices rise across curve

    By Solarina Ho
    TORONTO, April 23 (Reuters) - The Canadian dollar was weaker
against its U.S. counterpart on Tuesday, pressured in part by
data that showed China's factory activity slowed and by a
general bias toward risk aversion following weak German data.
    German PMI data showed a sharp drop in the country's
business activity, fanning concerns about the euro zone economy,
while growth in China's vast factory sector also dipped in April
as new export orders shrank, suggesting China still faces
formidable global headwinds in the second
    "It's remarkably tightly ranged in the short term. It does
feel that we have a cautious top side bias," said Jeremy
Stretch, head of foreign exchange strategy at CIBC World Markets
in London.
   "You could partly attribute that to the backwash from the
Chinese PMI data ... There's certainly a bias toward slightly
more risk aversion earlier in the session in the wake of the
German manufacturing PMI numbers." 
    At 8:06 a.m. (1206 GMT), Canada's dollar was
trading at C$1.0276 versus the U.S. dollar, or 97.31 U.S. cents.
This was slightly weaker than its North American finish on
Monday at C$1.0261, 97.46 U.S. cents.
    A reasonable degree of top side interest was likely
containing the currency from pushing through C$1.03, said
Stretch, but added the Canadian dollar could test the C$1.0295
level in the near term.
    The currency was mixed against other major currencies and
trading within a narrow range against the U.S. dollar, between
CC$1.0252 and C$1.0285. Stretch said opportunities for the
currency were mostly outside of the USD/CAD space.
    Canadian retail sales are due at 8:30 a.m. and will be the
key domestic economic data for this week.
    Canadian government bond prices were higher across the
curve, with the two-year bond up 1.5 Canadian cents
with a yield of 0.937 percent, while the benchmark 10-year bond
 climbing 15 Canadian cents to yield 1.695 percent.