CANADA FX DEBT-C$ steady after Carney, eyes on U.S. bailout plan

Tue Feb 10, 2009 10:53am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* C$ slightly weaker after Carney testimony

* No change to view that further BOC rate cuts to come

* Bonds mixed with safe-haven bid at long end (Adds details)

By Frank Pingue

TORONTO, Feb 10 (Reuters) - The Canadian dollar remained slightly weaker on Tuesday after testimony from Bank of Canada Governor Mark Carney, with traders nervously awaiting details of a U.S. plan to shore up its ailing banks.

While the domestic currency saw little action during the course of Carney's comments, it managed to remain comfortably off an overnight low as traders that initially flocked to the greenback overnight due to its status as a safe haven started to take on more risk.

During testimony before a parliamentary finance committee, Carney said the central bank has considerable flexibility to deal with the economy, including room to cut interest rates and expand liquidity operations.

That did little to alter expectations for the Bank of Canada to cut its key interest rate below the current 50-year low of 1.00 percent.

"The markets are pricing in pretty much another 50 (basis) point cut on March and that will keep the Canadian dollar on the defensive in the interim period," said Derek Holt, an economist at Scotia Capital.   Continued...