CANADA FX DEBT-C$ firms, range-bound after BOC outlook
* C$ firms to C$0.9727, or $1.0281
* Bond prices lower across the curve
By Solarina Ho
TORONTO, March 2 (Reuters) - The Canadian dollar firmed against its U.S. counterpart on Wednesday fueled in part by stronger oil prices, but remained range-bound a day after the Bank of Canada left interest rates unchanged.
At 8:27 a.m. (1327 GMT), the currency CAD=D4 stood at C$0.9727 to the U.S. dollar, or $1.0281, up from Tuesday's North American finish of C$0.9749 to the U.S. dollar, or $1.0257.
The currency was trading off Tuesday's high of C$0.9684 to the U.S. dollar, however, hit prior to the central bank's rate decision. It was the highest level reached since November 2007.
"It seems very quiet today in the aftermath of yesterday's Bank of Canada rate announcement," said David Bradley, director of foreign exchange trading at Scotia Capital.
"I think the markets were a little disappointed the statement was a little bit more dovish, or less hawkish, than the markets were looking for." [ID:nBCL1EE72W]
This is the biggest retracement made by the Canadian dollar in a week, when it had weakened to as low as C$0.9960, although ADP private-sector jobs data for the U.S., which surpassed expectations, kept the greenback in check and provided a modest boost for the Canadian dollar. [ID:nEAP102200] [FRX]
Oil, a major Canadian export, also provided some strength as crude oil prices climbed on warnings by Libya that prices would rise and as government forces fought rebels. U.S. crude hit more than $100 while Brent reached close to two-and-a-half year highs, hitting over $115 overseas. For more details see [O/R][ID:nSGE72103H]
Broad-based U.S. dollar weakness and strength in the euro, driven by expectations of higher interest rates, also helped.
"If the euro breaks through ($1.3850), just on general dollar weakness you'll probably see USD/CAD trade back down C$0.9715 area," said Bradley.
With little data ahead, the Canadian currency is expected to be fairly range-bound, said Bradley, who expects the currency to move between C$0.9700 and C$0.9800 for the remainder of the week.
"I think there's probably still plenty of interest on the top side around C$0.98 by sovereign reserve-types to buy Canadian dollar to diversify their foreign exchange holdings," said Bradley.
Canadian bond prices were lower across the curve.
The two-year bond CA2YT=RR was 2 Canadian cents lower yielding 1.801 percent, while the 10-year bond CA10YT=RR fell C$0.04 Canadian cents to yield 3.293 percent. (Editing by Theodore d'Afflisio)
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