CANADA FX DEBT-C$ strengthens as commodities, equities rise

Wed Apr 24, 2013 4:34pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* C$ at $1.0256 vs US$, or 97.50 U.S. cents
    * Oil and gold prices rise; equity markets rally
    * U.S. durable goods record biggest drop in 7 months
    * Investors await announcement of next Bank of Canada chief

    By Solarina Ho
    TORONTO, April 24 (Reuters) - The Canadian dollar firmed
against the U.S. dollar on Wednesday as commodity and most
equity markets rallied but it stayed within its recent tight
    Oil prices rose, led by a gain of 2.5 percent in U.S. crude
on a surprisingly big drop in U.S. weekly gasoline stockpiles.
Gold prices also climbed following a recent sell-off that sent
the precious metal to a two-year low.  
    The moves helped lift the Toronto Stock Exchange's
resource-rich benchmark index nearly 1.5 percent. Most global
equity markets also rose following healthy corporate earnings
and speculation that the European Central Bank will cut interest
rates following weak economic data out of Germany. 
    "Definitely a lag effect with what was going on with the
commodity market and the equity market and I think that was what
led to the push," said David Bradley, director of foreign
exchange trading at Scotiabank, noting the currency did not
react initially to the rally.
    "I think the market's positioned long-(U.S.)dollar."
    The Canadian dollar, which was weaker against most other
major currencies, finished the North American session at
C$1.0256 against its U.S. counterpart, or 97.50 U.S. cents,
slightly stronger than Tuesday's close at C$1.0262, or 97.45
U.S. cents.
    Canada's dollar did not budge after U.S. data showed orders
for long-lasting U.S. manufactured goods recorded their biggest
drop in seven months in March, while a gauge of planned business
spending rose only modestly, signs of a slowdown in economic
    The Bank of Canada is expected to announce a replacement any
day for Governor Mark Carney, who is leaving in June to head the
Bank of England. The bank's current deputy, Tiff Macklem, is
widely expected to take the helm, but analysts say there is
always a chance of a surprise.
    The loonie, as the currency is colloquially known, has
finished within a tight 12-point range since the central bank
stuck to its oft-repeated view last week that its next interest
rate move will be a rise.
    Canadian government bond prices were generally higher across
the curve, with the two-year bond up less than half a
Canadian cent to yield of 0.945 percent and the benchmark
10-year bond climbing 10 Canadian cents to yield
1.717 percent.