CANADA FX DEBT-C$ a touch firmer as Bank of Canada, oil keeps moves in check

Thu Oct 23, 2014 4:46pm EDT
 
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(Adds analyst comment, closing figures, details)
    * Canadian dollar at C$1.1233 or 89.02 U.S. cents
    * Bond prices lower across the maturity curve

    By Solarina Ho
    TORONTO, Oct 23 (Reuters) - The Canadian dollar was
marginally stronger against its U.S. counterpart on Thursday,
following Wednesday's volatility on disappointing economic data
and a mixed message from the Bank of Canada.
    The currency touched its weakest level on Wednesday after
unexpectedly soft retail sales data, but quickly strengthened to
its firmest level of the session after the Bank of Canada
dropped its reference to neutrality in its rate statement.
    Investors were unable to get clarity from the Bank of Canada
when a scheduled press conference was canceled after a gunman
shot dead a soldier at the Canadian War Memorial in Ottawa and
gunfire erupted inside parliament, near a room where Prime
Minister Stephen Harper was speaking.
    "CAD's really just held fairly tight throughout the entire
session ... We have oil prices, which even though they're higher
on the day, are still fairly suppressed," said Camilla Sutton,
chief currency strategist at Scotiabank.
    "And we had yesterday's conflicted (message) between a
somewhat hawkish statement and a more dovish (monetary policy
report), and the absence of a press conference."
    The Canadian dollar, which was among the strongest
performing currencies, closed at C$1.1233 to the greenback, or
89.02 U.S. cents, only slightly firmer than Wednesday finish at
C$1.1243, or 88.94 U.S. cents.
    Investors had widely expected the central bank to hold its
key interest rate at 1 percent, which it did, and to maintain a
neutral to dovish cautious tone in its monetary policy report.
After abandoning the "neutral" reference, market participants
were hoping to glean additional details on the Bank of Canada's
intentions and overall outlook.
    Canadian government bond prices were lower across the
maturity curve, with the two-year off 4.5 Canadian
cents to yield 1.008 percent and the benchmark 10-year
 shedding 36 Canadian cents to yield 2 percent.

 (Editing by Nick Zieminski and Grant McCool)