CANADA FX DEBT-C$ slips versus greenback, driven by euro demand

Mon Jul 5, 2010 8:22am EDT
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 * C$ slips to 93.87 U.S. cents
 * Bond prices rise the curve
 TORONTO, July 5 (Reuters) - The Canadian dollar fell
against its U.S. counterpart on Monday morning, despite
strength in the euro, a recent gauge of appetite for riskier
assets and currencies.
  World stock prices also slipped for the fourth day running
on Monday and the greenback traded close to two-month lows on
growing concerns of slowdowns in the United States and China,
while European sovereign debt issues appeared to ease.
 "With euro popping up versus the U.S. dollar you'd almost
believe that Canada should be strengthening. Instead we have
not seen the Canadian dollar strengthen and instead we've seen
strong demand for euro buying and Canada selling," said C.J.
Gavsie, managing director of foreign exchange sales at BMO
Capital Markets.
 "What we're seeing is straight demand now versus
 Concern about the U.S. economy mounted after Friday's jobs
data showed weak private hiring, but trading was was expected
to be thin on Monday because of the U.S. Independence Day
 On the data front, the key event will be Friday's domestic
employment figures for June, which are expected to show 15,000
jobs were added in the month. [ID:nN02188375]
 At 8:09 a.m. (1209 GMT), the Canadian dollar was at
C$1.0653 to the U.S. currency, or 93.87 U.S. cents, down from
Friday's finish at C$1.0624 to the U.S. dollar, or 94.13 U.S.
 Adding pressure to the Canadian currency, said Gavsie, were
large merger and acquisitions by Canadian companies needing to
buy U.S. funds, which were expected to conclude this week.
 In today's range, he said market players were watching for
Canadian dollar softness at C$1.0675. "Very concerned that if
it does break through that we're going to run up into the
C$1.0710 area on a technical basis."
 Canadian government bond prices, however, rallied across
the curve.
 The two-year government bond CA2YT=RR edged 4 Canadian
cents to yield 1.425 percent, while the 10-year bond
CA10YT=RR jumped 27 Canadian cents to yield 3.073 percent.
 (Reporting by Claire Sibonney; Editing by W Simon )