CANADA FX DEBT-C$ strengthens, but lower oil prices seen weighing

Fri Oct 24, 2014 9:51am EDT
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* Canadian dollar at C$1.1204 or 89.25 U.S. cents
    * Bond prices higher across the maturity curve

    By Andrea Hopkins
    TORONTO, Oct 24 (Reuters) - The Canadian dollar was
marginally stronger against its U.S. counterpart on Friday, but
was seen at risk of weakening due to lower oil prices and
worries about the results of European bank stress tests that are
due on the weekend.
    Brent crude fell below $86 a barrel on news of strong supply
from Middle East OPEC producers. Markets were also hit by news
of the first confirmed case of Ebola in New York.
    The Canadian currency had strengthened on Wednesday after a
Bank of Canada statement dropped a reference to neutrality on
interest rates. But investors were unable to get more clarity
from the central bank because a scheduled press conference was
canceled after a gunman shot dead a soldier at the National War
Memorial in Ottawa and gunfire erupted inside parliament.
    Bank of Canada Governor Stephen Poloz is now set to testify
at the Senate banking committee on Oct. 29. His testimony had
been scheduled for Thursday but was canceled due to the shooting
incidents in Ottawa. 
    "Dollar-Canada has moved down to the low C$1.12s but not
below C$1.12, and it is still trading the range and the range is
still fairly well defined at C$1.12 to C$1.13 - the short-term
goal posts as it were," said Jack Spitz, managing director of
foreign exchange at National Bank Financial.
    At 9:10 a.m. (1310 GMT) the Canadian dollar was at
C$1.1204 to the U.S. dollar, or 89.25 U.S. cents, stronger than
Thursday's North American session close of C$1.1233 to the
greenback, or 89.02 U.S. cents.
    Spitz said he didn't expect the loonie's strength to last.  
    "Crude is turned down, as is natural gas, 1 to 1.5 percent
and that price action is likely to weigh on a currency like
Canada, so we expect (the Canadian dollar to weaken) a bit off
the C$1.12s back into the middle of the range, C$1.1220 to
C$1.1240," he said.
    Global stock markets looked headed for their strongest week
of the year on Friday following reassuring company results,
encouraging data from the world's biggest economies and signs
the European Central Bank is upping its efforts to stimulate the
 European economy.
    Canadian government bond prices were higher across the
maturity curve, with the two-year up 1.5 Canadian
cent to yield 0.997 percent and the benchmark 10-year
 rising 10 Canadian cents to yield 1.990 percent.

 (Reporting by Andrea Hopkins; Editing by Peter Galloway)