CANADA FX DEBT-Canadian dollar flat; buoyant greenback pressures

Thu Feb 3, 2011 9:57am EST
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 * C$ little changed at $1.0117
 * Euro weakness boosts US$ against range of currencies
 * Bond prices fall across curve
 TORONTO, Feb 3 (Reuters) -  The Canadian dollar was
slightly softer against its the U.S. dollar on Thursday,
pressured by weakness in the euro after the European Central
Bank President Jean-Claude Trichet sounded less hawkish than
 The euro extended losses against the greenback as markets
focused on the ECB's view that inflation expectations remained
firmly anchored, dampening speculation of an interest-rate
hike. [FRX/]
 The euro's struggles helped to boost the U.S. dollar's
fortunes against a range of currencies including the Canadian
dollar, said Sacha Tihanyi, currency strategist at Scotia
 "Broadly speaking the U.S. dollar is much better bid today,
and it's coming off what's happening to euro/dollar," he said.
 "A lot of the euro gains recently have been predicated on
more hawkish inflation talk and expectation of more monetary
tightening over the course of the next 12 months."
 At 9:35 a.m. (1435 GMT), the Canadian currency CAD=D4 was
at C$0.9884 to the U.S. dollar, or $1.0117, slightly down from
Wednesday's North American finish at C$0.9882 to the U.S.
dollar, or $1.0119.
 Data that showed U.S. nonfarm productivity grew faster than
expected in the fourth quarter also helped boost the greenback
at the expense of other currencies. [ID:nN03291230]
 Tihanyi noted that the market focus was on Canadian and
U.S. employment figures for January, to be released on Friday.
In Canada, employers are seen adding 15,000 jobs, while the
unemployment rate is expected to hold steady at 7.6 percent.
 Canadian bond prices fell, following the path of U.S.
Treasuries, which weakened on worries about inflation and
optimism over an economic recovery. [US/]
 The two-year bond CA2YT=RR was down 8 Canadian cents to
yield 1.788 percent, while the 10-year bond CA10YT=RR dropped
39 Canadian cents to yield 3.428 percent.
 (Reporting by Claire Sibonney; editing by Jeffrey Hodgson)