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

Thu Feb 10, 2011 8:26am EST
 
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 * 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: Quote) announced
late Wednesday that it will sell half of a prolific Canadian
shale gas project to PetroChina (601857.SS: Quote) 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)