Growth concerns whittle away at Canadian dollar

Mon Mar 10, 2008 4:57pm EDT
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By John McCrank

TORONTO (Reuters) - The Canadian dollar fell 0.7 percent against the U.S. dollar on Monday as fears that the global economic slowdown will hobble Canada's economy trumped a string of would-be positives for the currency, including another piece of stellar housing data.

Domestic bond prices rose as investors sought the safety

of government debt amid a stock market sell-off.

The Canadian currency closed at US$1.0033, valuing a U.S. dollar at 99.67 Canadian cents, down from US$1.0105, or 98.96 Canadian cents to the U.S. dollar, at Friday's close.

The Canadian dollar traded within a range of US$1.0146, valuing a U.S. dollar at 98.56 Canadian cents, and US$1.0016, valuing a greenback at 99.84 U.S. cents.

The currency initially moved rose after morning data showed that February housing starts rose 15.4 percent to a seasonally adjusted annualized rate of 256,900 units, well above consensus expectations of analysts who called for 202,000 starts.

Another positive factor was news late Friday that another hurdle was cleared in the C$34.8 billion buyout of Canada's biggest telecoms company, BCE Inc, after the Quebec Superior Court gave the deal its stamp of approval.

"If that deal goes through, it will provide a lot of Canadian dollar buying," said Camilla Sutton, currency strategist at Scotia Capital.   Continued...