CANADA FX DEBT-C$ turns higher after eyeing C$1.05 level

Thu Aug 12, 2010 1:33pm EDT
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* C$ rises to 95.93 U.S. cents

* Bond prices slip after two-days of big gains (Updates to midday)

OTTAWA Aug 12 (Reuters) - The Canadian dollar turned slightly firmer against the U.S. currency on Thursday, reclaiming ground it had lost because of growing doubts about the outlook for the global economy.

It approached the key level of C$1.05 to the U.S. dollar, but when it did not break through this mark, it gained a little momentum higher with no major Canadian economic releases scheduled for the day.

At 1:10 p.m. (1710 GMT), the currency CAD=D4 was at C$1.0424 to the U.S. dollar, or 95.93 U.S. cents, up moderately from Wednesday's finish at C$1.0453 to the U.S. dollar, or 95.67 U.S. cents.

"Overall the Canadian dollar is outperforming today," said Tyson Wright, senior foreign exchange trader at Custom House, a currency services firm in British Columbia.

"It's consolidated right under that C$1.05 mark. I think the relative economics are coming into play right now."

Wright said the U.S. economy was a concern and, because the United States is by far Canada's biggest trading partner, the Canadian dollar could come under pressure in the medium term.

The currency slid as low as C$1.0494 to the U.S. dollar, or 95.29 U.S. cents. Wright noted "a lot" of resistance around the C$1.0475-C$1.05 area, but said the currency remains in the broad range of C$1.01-C$1.0750, where it has been for months.   Continued...