CANADA FX DEBT-C$ retreats vs firmer US$ as markets await Fed

Tue Jun 18, 2013 9:26am EDT
 
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* C$ at C$1.0195 vs US$, or 98.09 U.S. cents
    * Markets await Fed news conference on Wednesday for
monetary policy clarity
    * U.S. housing starts rise less than expected; U.S. CPI
climbs in May
    * Bond prices mostly lower across maturity curve

    By Solarina Ho
    TORONTO, June 18 (Reuters) - The Canadian dollar softened
against a broadly stronger U.S. dollar, as investors positioned
themselves ahead of guidance by the U.S. Federal Reserve on
where it will take its monetary policy.
    Markets have been jittery in recent weeks on speculation the
Fed could begin winding down stimulus soon, and investors are
looking to Fed chief Ben Bernanke's news conference on Wednesday
after the central bank's policy meeting for more clarity.
    "It's more (U.S.) dollar than Canada specifically in that
the (U.S.) dollar is up against all of the majors today," said
Adam Cole, global head of FX strategy at RBC Capital Markets in
London.
    "I think we're still seeing people shuffling positions
around ahead of the FOMC meeting tomorrow. There hasn't been a
lot in the way of hard news to digest."
    The Canadian dollar was trading at C$1.0195 versus the
greenback, or 98.09 U.S. cents at 8:55 a.m. (1255 GMT), a modest
retreat from Monday's close at C$1.0177, or 98.26 U.S. cents.
    It was mostly outperforming other major currencies and
expected to trade between C$1.0190 and C$1.0240 during Tuesday's
North American session, according to an RBC research note.
    There was no Canadian data to report. South of the border,
U.S. consumer prices rose in May and a gauge of underlying price
pressures showed signs of stabilizing after a long decline, a
potential comfort to Fed policymakers who would like to see
stronger inflation. 
    U.S. housing starts rose less than expected in May, likely
due to labor and material constraints, though the overall trend
was consistent with a recovering housing market. 
    Government bond prices were mostly lower across the maturity
curve, with the two-year bond shedding 1.5 Canadian
cents to yield 1.119 percent, and the benchmark 10-year bond
 off 7 Canadian cents to yield 2.164 percent.