CANADA FX-C$ softer ahead of rate decision

Tue Apr 12, 2011 8:28am EDT
 
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 TORONTO, April 12 (Reuters) - The Canadian dollar was
slightly weaker on Tuesday ahead of the Bank of Canada's
interest rate decision, joining a sell-off in riskier assets
including global stocks and commodities.
 Global share prices slipped on Tuesday while commodity
prices tumbled from record peaks after a Goldman Sachs report
advised investors to lock in profits before oil and other
commodity markets reverse. [MKTS/GLOB]
 "In spite of the upcoming BoC rate announcement set for
9:00 this morning - which often dampens price moves in the
days/hours leading up to it - the pair saw some volatility last
night as it reacted in line with broader macro movers," Jack
Spitz, managing director of foreign exchange at National Bank
Financial, said in a note to clients.
 "Assuming that no change in rates is a foregone conclusion
- we will be looking for (Bank of Canada Governor Mark) Carney
et al. to walk a very tight line between preparing the market
for future rate hikes while trying not to exacerbate strength
in the loonie."
 The currency CAD=D4 was trading at C$0.9581 to the U.S.
dollar, or $1.0437, compared with its close on Monday at
C$0.9565 to the U.S. dollar, or $1.0455.
 All 41 economists and strategists in a Reuters poll
released on Thursday expected the Bank of Canada to keep its
benchmark interest rate unchanged at 1 percent. [CA/POLL]
[BOC-PRE]
 (Reporting by Jeffrey Hodgson, Editing by Chizu Nomiyama)