CANADA FX DEBT-C$ at nearly one-month high as U.S. dollar slides

Tue May 6, 2014 9:47am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* Canadian dollar at C$1.0902 or 91.73 U.S. cents
    * Bond prices mostly lower across the maturity curve

    By Leah Schnurr
    TORONTO, May 6 (Reuters) - The Canadian dollar strengthened
against the greenback on Tuesday to its highest level in nearly
a month, driven upward by a broad slide in its U.S. counterpart
despite mixed domestic trade data.
    The gain helped the loonie break out of its recent trading
range. The currency has been comfortable trading around either
side of C$1.10 the last few weeks and Tuesday's action saw it
push into the low C$1.09s.
    Even data that showed Canada posted a smaller-than-expected
trade surplus in March did not dent the loonie. The domestic
surplus fell to C$79 million ($72.06 million) as exports fell
and imports rose. Still, February's surplus was revised sharply
higher to C$847 million. 
    The U.S. dollar was the focus in currency markets as
investors looked past recent signs of U.S. economic improvement
and sold the greenback. The U.S. dollar was down 0.5 percent
against a basket of currencies.
    "It really isn't a Canadian dollar story this morning. I
think it really is the U.S. dollar that's driving moves, not
just against the Canadian dollar, but against every cross," said
    Greg Moore, senior currency strategist at Royal Bank of
Canada in Toronto.
    The Canadian dollar was at C$1.0902 to the
greenback, or 91.73 U.S. cents, stronger than Monday's close of
C$1.0952, or 91.31 U.S. cents. The currency hit a session high
of C$1.0898, its highest level since early April.
    "Overnight moves were a bit of a momentum play," said Moore.
    After breaking through decent short-term support in the
mid-C$1.09 level, the currency could see momentum follow through
toward the upper C$1.08 area, he said.
    Canadian government bond prices were mostly lower across the
maturity curve, though the two-year was unchanged to
yield 1.074 percent, while the benchmark 10-year was
off 8 Canadian cents to yield 2.379 percent.
($1 = 1.0963 Canadian Dollars)

 (Reporting by Leah Schnurr; Editing by Nick Zieminski)