CANADA FX DEBT-C$ retreats more than 1 pct in post-Fed correction

Thu Mar 19, 2015 5:00pm EDT
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(Updates with comment, closing figures and details)
    * Canadian dollar ends at C$1.2726 or 78.58 U.S. cents
    * Bond prices higher across the maturity curve

    By Solarina Ho
    TORONTO, March 19 (Reuters) - The Canadian dollar lost more
than 1 percent against the greenback on Thursday, after making
hefty gains the day before,  as market participants bought back
the U.S. dollar and as oil prices softened.
    The U.S. dollar tumbled against a range of currencies on
Wednesday after the U.S. Federal Reserve gave a much more
cautious statement on raising interest rates than anticipated.
The Canadian dollar surged more than 2 percent on Wednesday.
    "I think there's still a pretty sizeable bias to hold on to
CAD shorts for now," said Bipan Rai, director of foreign
exchange strategy at CIBC World Markets.
     The Canadian dollar ended the session at C$1.2726
to the U.S. dollar, or 78.58 U.S. cents, roughly 1.3 percent
weaker than Wednesday's close of C$1.2570, or 79.55 U.S. cents. 
    The currency was also hurt by another dive in the price of
oil, a key Canadian export. Brent crude lost nearly 3 percent,
settling below $55 a barrel, while U.S. crude gave back nearly 2
percent to settle just under C$44.
    Oil was pressured by the rebounding U.S. dollar and by
comments from Kuwait's oil minister, who said OPEC has no choice
but to keep production steady, renewing concerns about a global
oil surplus. 
    The Bank of Canada surprised markets with a 25 basis point
rate cut in January to provide "insurance" against the impact of
oil's price drop on the economy.
    "We don't really think crude prices at these levels will
lead them to cut rates again in April," Rai said. "Still, market
psychology is a different animal altogether, so the CAD could be
taking a bit of a hit as to the way crude's been trading today."
    Investors are turning to Canadian retail sales data for
January and inflation data for February on Friday for further
    Canadian government bond prices were higher across the
maturity curve, with the two-year up 1 Canadian cent
to yield 0.479 percent and the benchmark 10-year 
climbing 9 Canadian cents to yield 1.314 percent.

 (Editing by Peter Galloway)