CANADA FX DEBT-C$ softer after factory data; euro debt worries

Thu Apr 14, 2011 9:36am EDT
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   * C$ at C$0.9662 to the U.S. dollar, or $1.0350
 * Canadian manufacturing sales fall in February
 * Euro debt zone worries resurface
 By Solarina Ho
 TORONTO, April 14 (Reuters) - Canada's dollar weakened
against the U.S. currency on Thursday following
weaker-than-expected Canadian manufacturing data and renewed
worries about peripheral European government debt.
 A report showed manufacturing sales fell in February, its
biggest dip since August 2009, as auto sales pulled back after
a January surge and the strong Canadian dollar continued to
hobble exporters. [ID:nN14146333]
 "The (manufacturing) number was pretty weak and
manufacturing is still a pretty big fraction of the Canadian
economy," said Jacqui Douglas, a currency strategist at TD
 "That being said though, I think USD/CAD is mostly being
driven by what the U.S. dollar is doing ... Overnight we saw a
pretty big negative turn in risk sentiment. I think the markets
are pretty worried about Europe again today."
 At 9:04 a.m. (1305 GMT), the currency CAD=D4 stood at
C$0.9662 to the U.S. dollar, or $1.0350, softening from
Wednesday's North American finish of C$0.9624 to the U.S.
dollar, or $1.0391.
 The U.S. dollar found strength from a weaker euro,
following talk that Greece and possibly Ireland may be forced
to restructure their ballooning debts. One central banker
warned that such a move by Athens would be a "catastrophe".
[FRX/] [ID:nLDE73D0XQ]
 But the dollar extended declines against the yen after data
showed initial U.S. weekly jobless claims came in higher than
 Separately, a Reuters poll showed Canada's economic outlook
has improved in recent months, boosted by stronger commodity
prices, though the pace of growth is expected to soften
slightly next year. [ECILT/CA]
 TD's Douglas said the Canadian dollar looked set to trade
within a range between an early session low of C$0.9670 on the
support side and the C$0.9600 range on the resistance side.
 Canadian bond prices were higher across the curve as
investors sought safety, mirror U.S. Treasuries, which added to
earlier gains following the higher-than-expected U.S. claims
for unemployment benefits. [US/]
 The two-year bond CA2YT=RR was up 7.5 Canadian cents to
yield 1.784 percent, while the 10-year bond CA10YT=RR gained
19 Canadian cents to yield 3.348 percent.
 (Editing by Jeffrey Hodgson)