CANADA FX DEBT-C$ slips as commodities, stocks pull back

Wed Jan 5, 2011 8:11am EST
 
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 * C$ falls to 99.77 U.S. cents
 * Bonds firmer across curve
 By Claire Sibonney
 TORONTO, Jan 5 (Reuters) -  The Canadian dollar retreated
against the greenback for a second session on Wednesday as this
week's sharp fall in commodity prices prompted investors to
take a breather.
 Oil, a key Canadian export that only a few days ago looked
to be heading to $100 a barrel again, hovered below $89 a
barrel. [O/R]
The price of gold and copper also tumbled, hurt by
profit-taking and a stronger greenback and putting pressure on
world equity markets. [MKTS/GLOB]
 "Generally what we're seeing is that CAD is a mid performer
here today," said Camilla Sutton, chief currency strategist at
Scotia Capital. "Overall we're in an environment of risk
aversion, so that's created some downside pressure on equities
as well commodities and some strength in the U.S. dollar
generally. Canada is reacting on the back of that."
 At 7:57 a.m. (1257 GMT), the Canadian dollar CAD=D4 stood
at C$1.0023 to the U.S. dollar, or 99.77 U.S. cents, down from
Tuesday's finish at C$0.9985 to the U.S. dollar, or $1.0015.
 Sutton said the rest of the day could see the Canadian
dollar move between C$0.9950 and C$1.0050, hovering on either
side of parity, which is in line with Scotia's forecast for the
first part of the year.
 December employment reports on Friday will provide the main
focus this week, with job growth expected in both the United
States and Canada. U.S. Federal Reserve Chairman Ben Bernanke's
congressional testimony on Friday will also be closely
followed. [ID:nN31145126] ECON
Canadian government bond prices were mixed across the curve.
The two-year bond CA2YT=RR was up 8 Canadian cents to yield
1.681 percent, while the 10-year bond CA10YT=RR was down 8
Canadian cents to yield 3.145 percent.
  (Editing by Padraic Cassidy)