CANADA FX DEBT-C$, bonds fall after U.S. trade gap narrows

Thu Mar 11, 2010 10:01am EST
 
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 * Canadian dollar backs up to 97.03 U.S. cents
 * Bonds mildly lower
 * Commodities boost Canada's trade surplus in January
 * U.S. trade gap narrows
 TORONTO, March 11 (Reuters) - The Canadian dollar fell
against the U.S. greenback on Thursday as a shrinking in the
U.S. trade deficit outweighed a series of domestic data that
showed the Canadian economy was getting healthier.
 At 9:15 a.m. (1415 GMT), the Canadian dollar was at
C$1.0306 to the U.S. dollar, or 97.03 U.S. cents, down from
Wednesday's close at C$1.0259 to the U.S. dollar, or 97.48 U.S.
cents.
 Canada's trade surplus grew more than expected in January
to C$799 million as higher prices for commodities such as gold
boosted exports, while imports fell, Statistics Canada said.
[ID:nN11146780]
 But the focus was on the U.S. trade deficit that shrank to
$37.29 billion in January from a revised $39.9 billion in
December. Economists were expecting a deficit of $41 billion
for the month. [ID:nCAT005132]
 "The Canadian trade report looks healthier than the U.S.
report (but) the U.S. trade deficit narrowed unexpectedly,"
said Sal Guatieri, senior economist at BMO Capital Markets.
 "It could be the market is just focused on the improvement
in the U.S. trade balance in the headline number even though
the details were fairly weak."
 Statistics Canada also said Canadian fourth-quarter
capacity use jumped the most in three years, while Canadian new
home prices climbed again in January.  [ID:nN11204326]
[ID:nN11254432]
 Canadian government bond prices were mildly lower on
Thursday after the data. The two-year Canadian government bond
CA2YT=RR fell 2 Canadian cents to C$99.91 to yield 1.546
percent, while the 10-year bond CA10YT=RR was off 7 Canadian
cents at C$101.60 to yield 3.545 percent.
 (Reporting by Ka Yan Ng, Editing by Chizu Nomiyama)