CANADA FX DEBT-C$ makes slight gain after eventful week

Mon Nov 10, 2014 10:00am EST
 
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* Canadian dollar at C$1.1309 or 88.43 U.S. cents
    * Bond prices mixed across the maturity curve

    By Alastair Sharp
    TORONTO, Nov 10 (Reuters) - The Canadian dollar rose
slightly against the greenback on Monday, building modestly on
gains made late last week, as investors paused to assess the
recent drastic moves in the price of oil and the U.S. dollar.   
    The loonie, as Canada's currency is colloquially known, has
dropped steeply since late October in line with a fall in the
price of crude oil, a major Canadian export. 
    In that same period, the U.S. dollar has climbed versus most
major currencies as more hawkish-looking U.S. central bankers
have expressed increasing confidence in the U.S. economic
recovery.
    "We could be entering a period of rest here where several
currencies and several asset classes have made really large
moves and now it's time to catch your breath and rethink where
things should be valued," said Camilla Sutton, chief currency
strategist at Scotiabank. 
    "But certainly that fall in oil prices is a material shift
for the Canadian dollar," she said.
    The price of a barrel of oil has steadily fallen since
mid-2014 due to excess supply and subdued demand. It rose on
Monday, which Sutton said likely supported the loonie.
    The Canadian dollar was last seen trading at
C$1.1309 to the greenback, or 88.43 U.S. cents, stronger than
Friday's close of C$1.1333, or 88.24 U.S. cents.
    The loonie jumped on Friday on a surprisingly robust
domestic jobs report after hitting a more than five-year low of
C$1.1466 earlier in the week.  
    The fundamental picture remains in favor of further gains
for the U.S. dollar, however, with Japan again easing monetary
policy and the euro zone economic picture making a strong case
for similar action from the European Central Bank.
    With little Canadian economic data of note on tap until
inflation figures later in the month, Scotiabank's Sutton said
Canada's currency may take near-term direction from upcoming
Chinese figures on new loans, industrial production and retail
sales. 
    Canadian government bond prices were mixed across the
maturity curve, with the two-year flat to yield 1.018
percent and the benchmark 10-year down 7 Canadian
cents to yield 2.033 percent.

 (Editing by Peter Galloway)