CANADA FX DEBT-C$ gives in as European stocks, oil weaken

Wed Jul 14, 2010 8:22am EDT
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 * C$ falls to 96.48 U.S. cents
 * Bonds weaker across the curve
 By Claire Sibonney
 TORONTO, July 14 (Reuters) - The Canadian dollar softened
against the greenback on Wednesday, as investors took their cue
to sell growth-related currencies from weaker European markets
and easing oil prices.
 World equity markets were mixed. Asian markets and U.S.
stock futures were higher as Intel's forecast-beating quarterly
results in the United States raised expectations of strong
corporate earnings in the second quarter.
 But European stocks pulled back as banks lost ground with
regulators due to finalize tough new bank capital and liquidity
rules. [MKTS/GLOB]
 "A lack of follow-through in Europe, again, against a
backdrop of next week's stress test results and the persistent
sovereign debt issues," said Jack Spitz, managing director of
foreign exchange at National Bank Financial.
 "As a result currency valuations are reflective more of a
risk-off environment as we head into the North American
  While gold and base-metal prices advanced, oil retreated
below $77 a barrel, falling from a two-week high, after a
weekly industry report showed a surprise increase in U.S. crude
inventories and European equities turned lower. [GOL/] [MET/L]
 At 8:07 a.m. (1207 GMT), the Canadian dollar CAD=D4 was
at C$1.0365 to the U.S. dollar, or 96.48 U.S. cents, down from
Tuesday's close at C$1.0337 to the U.S. dollar, or 96.74 U.S.
 "It's thin, holiday-inspired type trading but at the same
point in time there's a fairly long slate of data that's coming
out and I think the markets will remain very keen in terms of
assessing directional bias," Spitz said.
 In the day ahead, U.S. retail sales data and minutes of the
Federal Reserve's most recent rate-setting meeting were seen as
the major focal points.
 With U.S. and Canadian equity futures turning higher,
domestic government bond prices were slightly weaker across the
 The two-year bond CA2YT=RR lost half a Canadian cent to
yield 1.720 percent, while the 10-year bond CA10YT=RR was
down 8 Canadian cents to yield 3.284 percent.
 (Reporting by Claire Sibonney, Editing by Chizu Nomiyama)