CANADA FX DEBT-C$ flat to softer as greenback firms

Thu Dec 9, 2010 8:25am EST
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 * C$ slightly lower at 98.86 U.S. cents
 * Canadian bond prices flat to higher
 By Jennifer Kwan
 TORONTO, Dec 9 (Reuters) - The Canadian dollar weakened
slightly against its U.S. counterpart on Thursday morning,
pressured in part by firmness in the greenback.
 The dollar edged up on Thursday, still supported by a jump
in U.S. Treasury yields earlier this week, while the euro
slipped after ratings agency Fitch downgraded Ireland's
sovereign debt. [FRX/]
 "What we did see overnight was broad-based U.S. dollar
buying with the Canadian dollar weakening slightly against the
U.S.," said Matthew Strauss, senior currency strategist at RBC
Capital Markets.
 "It's more a move into the U.S. dollar rather than the
selling of the Canadian dollar."
 At 7:55 a.m. (1255 GMT), the Canadian dollar CAD=D4 stood
at C$1.0115 to the U.S. dollar, or 98.86 U.S. cents, down a
hair from Wednesday's finish at C$1.0108 to the U.S. dollar, or
98.93 U.S. cents.
 Strauss said moves were minimal and the market was looking
to the North American session for direction. The Bank of Canada
is expected to release its Financial System Review later on
Thursday morning, while economic releases include Canada's new
housing price index and U.S. initial jobless claims data.
 "Commodities slightly up, equity futures slightly up, which
suggests a bit of a risk appetite move, but that has not
filtered through to the FX market," he said.
 Key technical ranges in the short term include C$1.0139 to
the U.S. dollar, a support level for the Canadian currency,
said Strauss. A key Canadian dollar resistance level is at
C$1.0078 to the greenback.
 Canadian bond prices were largely flat to higher on
Thursday, tracking U.S. Treasuries. Debt prices edged higher
there as a better-than-expected bond auction the previous
session encouraged buyers to creep back into the market, ending
a two-day sell-off. [US/]
 The two-year bond CA2YT=RR ticked 2 Canadian cents higher
to yield 1.679 percent, while the 10-year bond CA10YT=RR was
unchanged to yield 3.264 percent.
 (Reporting by Jennifer Kwan; Editing by Chizu Nomiyama)