February 10, 2011 / 1:30 PM / 6 years ago

CANADA FX DEBT-C$ slips, but outperforms on PetroChina news

3 Min Read

 * C$ eases to $1.0021
 * PetroChina pays C$5.4 bln for Canadian gas assets
 * Bonds flat-to-lower despite risk-off environment
 * BoC Deputy Governor John Murray speaks in Regina
 By Ka Yan Ng
 TORONTO, Feb 10 (Reuters) - Canada's dollar slipped to its lowest in more than a week against the U.S. dollar on Thursday morning, pressured by overall risk aversion, but outperformed other currencies as PetroChina made a big investment in a Canadian natural gas asset.
 After nine months of talks, Encana Corp (ECA.TO) announced late Wednesday that it will sell half of a prolific Canadian shale gas project to PetroChina (601857.SS) for C$5.4 billion, marking the largest Chinese investment yet in a foreign natural gas asset. [ID:nN09296031]
 "Where we are positioned relative to other currencies overnight is largely reflecting foreign investment news overnight. That's giving us a little bit of outperformance relative to other currencies in this risk-off environment," said David Watt, senior currency strategist at RBC Capital Markets.
 "We're only behind the (U.S.) dollar and the British pound."
 At 8:05 a.m. (1305 GMT), the Canadian dollar CAD=D4 was at C$0.9979 to the U.S. dollar, or $1.0021, down from Wednesday's North American session at C$0.9939 to the U.S. dollar, or $1.0061. The Canadian dollar fell as low as C$0.9988 to the U.S. dollar, or $1.0012, its lowest since Feb. 1.
 Strong corporate earnings and the expectations of more to come have been a major driver of equities in the past year, backed by an improving economic climate. But a wave of disappointing results weighed on global stock markets on Thursday, and paused the recent draw of riskier assets. [MKTS/GLOB]
 But the pause did not translate to a rush into the safety of government debt either. Canadian government bonds held flat to lower on Thursday ahead of data and $24 billion sale of 30-year U.S. debt.
 The two-year Canadian government bond CA2YT=RR  was off 1 Canadian cent to yield 1.876 percent, while the 10-year bond CA10YT=RR eased 5 Canadian cents to yield 3.458 percent.
 Investors looked to new home price figures on Thursday as well as a speech about commodity prices by Bank of Canada Deputy Governor John Murray in Regina, Saskatchewan.
 (Reporting by Ka Yan Ng, Editing by Chizu Nomiyama)                                                  

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