CANADA FX DEBT-C$ softens to 6-mth low; Fed expectations drive U.S. win streak

Thu Sep 25, 2014 9:53am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* Canadian dollar at C$1.1110 or 90 U.S. cents
    * Bond prices rise across the maturity curve

    By Solarina Ho
    TORONTO, Sept 25 (Reuters) - The Canadian dollar retreated
to a six-month low against its U.S. counterpart on Thursday, as
the greenback powered higher on expectations that the Federal
Reserve will likely end its bond-buying next month and begin
raising the cost of borrowing next year.
    The U.S. dollar's winning streak, on track to be the longest
since the early 1970s, comes as the Canadian dollar faces
pressure at home. A series of dovish comments from the Bank of
Canada helped push the currency to six-month lows in the
previous session.
    "The last few days has been a relatively challenging one for
the Canadian dollar. Clearly we've seen a couple of attempts, or
at least acknowledgements, from the Bank that they ... wouldn't
be adverse to further cheapening up of the CAD," said Jeremy
Stretch, head of foreign exchange strategy in London with CIBC
World Markets.
    Stretch, who said this would help Canadian exports, also
noted that the short-term trend was still up for the U.S.
dollar, though the greenback was susceptible to some
profit-taking as the end of the month and quarter approaches.
    At 9:28 a.m. (1328 GMT), the Canadian dollar was at
C$1.1110 to the greenback, or 90 U.S. cents, weaker than
Wednesday's close of C$1.1057, or 90.44 U.S. cents.
    The currency was still mostly outperforming its major
currency counterparts, however.
    "In the context of what we're seeing in terms of some other
currencies against the U.S. dollar, you can argue that it's
actually holding in comparatively well," said Stretch.        
    Canadian government bond prices were higher across the
maturity curve, with the two-year rising 2 Canadian
cents to yield 1.135 percent and the benchmark 10-year
 adding 18 Canadian cents to yield 2.179 percent.

 (Reporting by Solarina Ho; Editing by Meredith Mazzilli)