CANADA FX DEBT-C$ touches 2-mth low as Yellen offers little impetus
* C$ at C$1.0468 vs US$, or 95.53 U.S. cents * Lack of surprises in Yellen's remarks curbs C$ enthusiasm * Bond yields higher across the maturity curve By Leah Schnurr TORONTO, Nov 14 (Reuters) - The Canadian dollar touched a two-month low on Thursday as early strength on optimism that the U.S. Federal Reserve will remain accommodative for some time wore off after comments from Janet Yellen lacked further impetus for the currency to move higher. At a hearing on her nomination to head the Fed, Yellen defended the U.S. central bank's steps to spur economic growth and called efforts to boost hiring an "imperative". Yellen's prepared remarks had been released in advance on Wednesday and had helped the loonie firm overnight as markets tried to suss out a timetable for the Fed to start to wind down its bond purchases. But analysts said expectations that Yellen will be dovish on policy are already well priced into the market at this point and the loonie lost steam during the North American session, hitting its lowest level since early September. "The loonie doesn't really have much going for it in the short to medium term. Everyone is looking for a reason to go short the loonie and long the U.S. dollar," said Rahim Madhavji, president of Knightsbridge FX.com in Toronto. The Canadian dollar ended the North American session at C$1.0468 to the greenback, or 95.53 U.S. cents, weaker than Wednesday's close of C$1.0462, or 95.58 U.S. cents. While the Canadian dollar could weaken further to the C$1.06 range, it should recover to C$1.03 by the middle of next year, Madhavji said. The loonie showed only muted reaction to figures that showed Canada's trade deficit in September dropped by more than half as exports grew at a much faster rate than imports. Canadian bond yields were higher across the maturity curve, with the two-year bond up half a Canadian cent to yield 1.106 percent, while the benchmark 10-year bond rose 17 Canadian cents to yield 2.558 percent.
© Thomson Reuters 2016 All rights reserved.