CANADA FX DEBT-C$ firms slightly, boosted by oil, factory sales

Fri Nov 14, 2014 9:58am EST
 
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* Canadian dollar at C$1.1339 or 88.19 U.S. cents
    * Bond prices mostly lower across the maturity curve

    By Leah Schnurr
    OTTAWA, Nov 14 (Reuters) - The Canadian dollar firmed
modestly against the greenback on Friday, sticking to a tight
range as it was supported by data that showed domestic factory
sales rose more than expected in September.
    A higher price of oil also helped the loonie stabilize the
day after a drop in crude knocked the currency lower. Whip-saw
trading for the Canadian dollar in recent sessions, partly due
to movements in oil prices, has left the currency moving
sideways for the week.
    While analysts expect the Canadian dollar is likely to
consolidate around current levels in the short-term, most see
more weakness down the line for the loonie.
    "I think we're rangebound for the U.S. dollar-Canadian
dollar for now and the next move is really going to have to come
from a major data point," said Mazen Issa, senior Canada macro
strategist at TD Securities in Toronto.
    Issa sees next week's inflation data or third-quarter gross
domestic product at the end of the month as potential catalysts,
while more signs of strength in the U.S. economy could also lift
the greenback to the detriment of the loonie.
    "The bias, for now, is you could still see a higher U.S.
dollar-Canadian dollar, but I would admit that the rally in U.S.
dollar-Canadian dollar has looked a little tired recently, maybe
a bit overbought," he said.
    The Canadian dollar was at C$1.1339 to the
greenback, or 88.19 U.S. cents, stronger than Thursday's close
of C$1.1376, or 87.90 U.S. cents. For the week, the loonie was
on track to decline 0.3 percent.
    Data that showed Canadian manufacturing sales rose more than
expected in September helped put a floor under the Canadian
dollar, though that was tempered by a strong retail sales report
out of the United States.  
    Canadian government bond prices were mostly lower across the
maturity curve, with the two-year down 3 Canadian
cents to yield 1.021 percent and the benchmark 10-year
 down 19 Canadian cents to yield 2.066 percent.

 (Editing by Nick Zieminski)