CANADA FX DEBT-C$ in modest retreat on soft data

Fri Aug 16, 2013 5:20pm EDT
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* C$ at C$1.0339 vs US$, or 96.72 U.S. cents
    * Canadian currency gains 0.1 percent on week
    * 10-year bonds yields hit almost two-year high

    TORONTO, Aug 16 (Reuters) - The Canadian dollar fell versus
its U.S. counterpart as well as a string of other major
currencies on Friday following a batch of lackluster economic
data, but trading was subdued and range-bound, and the currency
ended the week almost flat.
    Data on Friday showed that foreigners in June sold the 
largest amount of Canadian securities since October 2007, with a
record fall in holdings of Canadian government debt a particular
    "That's a concern because it's one of the things that has
been supporting the Canadian dollar, and that's the first real
piece of evidence we have that that story has shifted," said
Camilla Sutton, chief currency strategist at Scotiabank.    
    Also, Canadian manufacturing sales unexpectedly fell in
June, scotching forecasts that called for an increase. It was
the fourth monthly drop in manufacturing sales in six months and
added to expectations of softer economic growth in the second
    "The Canadian data (has been) uninfluential in pushing
USD/CAD away from what we see as the short-term, certainly
intraday, range of C$1.0300 to C$1.0350," said Jack Spitz,
managing director of foreign exchange at National Bank
    The Canadian dollar ended the session at C$1.0339
versus the U.S. dollar, or 96.72 U.S. cents, weaker than
Thursday's close of C$1.0304, or 97.05 U.S. cents. It gained 0.1
percent over the course of the week.
    The currency was also sharply lower against the Australian
 and New Zealand dollars on Friday, and
slipped against the euro and the British pound
    In the United States, housing starts and permits for home
construction rose less than expected last month, suggesting that
higher mortgage rates could be hampering the housing market's
    The figures cast doubt on how fast the U.S. Federal Reserve
would move to scale back its bond-buying stimulus program.
    Prices for Canadian government debt were lower across the
maturity curve. The two-year bond slipped 2 Canadian
cents to yield 1.219 percent and the benchmark 10-year bond
 fell 32 Canadian cents to yield 2.714 percent, its
highest yield in nearly two years.