CANADA FX DEBT-C$ slightly weaker as greenback gains ahead of data

Mon Aug 12, 2013 4:43pm EDT
 
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* C$ at C$1.0303 vs US$, or 97.06 U.S. cents
    * US$ stronger on data expectations
    * Bond prices lower

    By Alastair Sharp
    TORONTO, Aug 12 (Reuters) - The Canadian dollar ended
marginally softer on Monday against a rallying U.S. dollar,
which strengthened on expectations of positive U.S. data this
week that could prompt the Federal Reserve to make a decision on
its monetary policy.
    With little market-moving Canadian data until manufacturing
sales on Friday, the Canadian dollar is expected to take its
cues from U.S. dollar moves.
    "This is just a day of more universal U.S. dollar strength,"
said David Tulk, chief Canada macro strategist at TD Securities.
    Tulk said U.S. retail sales and inflation data this week
will be key indicators for a market that is trying to gauge the
strength of the U.S. consumer heading into the second half of
the year.
    "We have the impression that the fiscal drag would be most
prominent in the first half. So we're trying to see, once we get
beyond that, what underlying momentum exists in the economy,"
said Tulk.
    The loonie, as Canada's currency is colloquially known,
barely moved against a range of other currencies amid a dearth
of domestic catalysts.
    "It's a quiet start to the week, very little in the way of
data," said Matt Perrier, managing director of foreign exchange
sales at BMO Capital Markets. "It's well within the established
range of the summer. It's not at its strongest and it's well off
its weakest point."
    The Canadian dollar ended the session at C$1.0303
to the greenback, or 97.06 U.S. cents. It closed last week at
C$1.0294, or 97.14 U.S. cents.
    BMO's Perrier said the trade in the currency would get more
interesting if it approaches either the late-July low of
C$1.0245, or C$1.0445, which it failed to breach in early
August. 
    U.S. retail sales data is expected on Tuesday while CPI data
is due on Thursday.
    Prices of Canadian government debt were lower. The two-year
bond lost 3 Canadian cents to yield 1.149 percent,
and the benchmark 10-year bond fell 42 Canadian
cents to yield 2.531 percent.