CANADA FX DEBT-C$ rises to one-week high on strong investment data

Mon Nov 18, 2013 4:31pm EST
 
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* C$ at C$1.0432 vs US$, or 95.86 U.S. cents
    * Foreign investors buy C$8.36 bln of Canadian securities
    * Bond yields higher across the maturity curve


    By Leah Schnurr
    TORONTO, Nov 18 (Reuters) - The Canadian dollar touched a
one-week high against the greenback on Monday after data showed
foreign demand for Canadian securities surged in September, and
as markets were encouraged by economic and social reforms
announced by China.
    Foreign investment in Canadian securities strengthened in
September with purchases of stocks rising to the highest level
since September 2009. 
    Nonresidents picked up C$8.36 billion ($8.04 billion) worth
of securities overall in September, the highest inflow in five
months and up from a C$2.08 billion investment the previous
month. 
    "An overall strong investment climate in Canada will garner
loonie strength and have more people investing in Canada over
the longer term," said Scott Smith, senior market analyst at
Cambridge Mercantile Group in Calgary.
    The loonie's session peak was C$1.0414, its highest
level in more than a week, but it trimmed some of those gains to
end the North American session at C$1.0432 to the greenback, or
95.86 U.S. cents, stronger than Friday's close of C$1.0447, or
95.72 U.S. cents.     
    The currency also got a boost from increased risk appetite
after China unveiled its boldest set of economic and social
reforms in nearly three decades late last week. 
    Analysts said the moves suggest greater liberalization for
the world's second-largest economy.
    "It just sets the stage for a more positive economic growth
outlook for China," said Gareth Sylvester, director at Klarity
FX in San Francisco.
    The loonie will likely trade in a range between C$1.0390 and
C$1.05 this week, Sylvester said.
    The Canadian currency had little reaction to comments from
Bank of Canada Senior Deputy Governor Tiff Macklem that the
financial reform agenda pursued by the Group of 20 economies has
reduced the risk of financial collapse. 
    Macklem did not provide any guidance on the Bank of Canada's
monetary policy or on the outlook for the economy.
 
    Canadian bond yields were higher across the maturity curve,
with the two-year bond up 2-1/2 Canadian cents to
yield 1.104 percent, while the benchmark 10-year bond
 rose 35 Canadian cents to yield 2.521 percent.