CANADA FX DEBT-C$ eases on greenback rally; data, BoC in focus

Mon Apr 13, 2015 4:47pm EDT
 
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(Updates with more comment from RBC Capital Markets, closing
numbers, new details on week ahead)
    * Canadian dollar ends at C$1.2592 or 79.42 U.S. cents
    * Bond prices mostly higher across the maturity curve

    By Solarina Ho
    TORONTO, April 13 (Reuters) - The Canadian dollar softened
against its U.S. counterpart on Monday, hurt by the greenback's
broad rally and surprisingly weak export data from China that
put pressure on commodity-linked currencies such as Canada's.
    Overall, however, the currency market was relatively calm
ahead of a busy week, which includes the Bank of Canada's April
rate decision and Monetary Policy Report, due on Wednesday, and
a slew of economic data.  
    "I think we will be stuck in a bit of a range ahead of
Wednesday and people waiting to see what the Bank (of Canada)
will say," said Mark Chandler, head of Canadian fixed income and
currency strategy at RBC Capital Markets.
    "I'd be very surprised if there's a sharp change in
direction. They've said they'll be patient until they get a good
reading on Q2."
    The Canadian dollar finished at C$1.2592 to the
greenback, or 79.42 U.S. cents, modestly weaker than Friday's
Bank of Canada's official close of C$1.2580, or 79.49 U.S.
cents.
    Expectations the Federal Reserve will increase interest
rates in the coming months have underpinned the U.S. dollar's  
rally.
    "The real story over the last week or two has been continued
U.S. dollar strength," Chandler said.
    The loonie has lost close to 0.9 percent over the last week.
    "That's a pretty good performance. There's only a couple of
currencies that's been stronger than us against the U.S.
dollar," he added.
    Data showed China's export sales contracted 15 percent in
March, deepening worries about the economic growth of one of the
world's biggest commodity consumers. 
    Slightly higher oil prices capped losses, but were not
enough to pull the loonie higher. U.S. crude prices were
up 0.7 percent to $52, while Brent crude added about 0.2
percent to $58. 
    Canadian government bond prices were mostly higher across
the maturity curve, with the two-year price up 0.5
Canadian cent to yield 0.521 percent and the benchmark 10-year
 rising 17 Canadian cents to yield 1.357 percent.
    The Canada-U.S. two-year bond spread was -1.5, while the
10-year spread was -57.3.

 (Reporting by Solarina Ho; Editing by Bernadette Baum and Andre
Grenon)