CANADA FX DEBT-C$ hangs on to parity versus U.S. dollar

Thu Apr 15, 2010 8:19am EDT
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 * C$ weakens slightly, hovers around parity
 * Bond prices higher across the curve
 By Claire Sibonney
 TORONTO, April 15 (Reuters) - The Canadian dollar weakened
slightly against its U.S. counterpart on Thursday but remained
near to parity, a day after rallying to finish above
one-for-one footing versus the greenback for the first time
since May 2008.
 The Canadian dollar CAD=D3 hit as high as C$0.9964 to the
U.S. dollar, or $1.004, on Thursday, and outperformed the euro
and its sister commodity currencies -- the Australian and New
Zealand dollars -- amid an overnight onset of risk aversion.
 "(The Canadian dollar) pretty flat overnight, however
against the crosses doing a little bit better as the U.S.
gained against most currencies except the yen and that came on
the back of increased concerns about Greece going forward,"
said Matthew Strauss, senior currency strategist at RBC Capital
 Euro zone pressures mounted as higher costs to insure
against a Greek default highlighted persistent concerns about
Greece's debt problems and cut demand for risky assets. [FRX]
 Oil prices hovered below $86 a barrel and gold prices eased
in Europe, which could also affect the commodity-lined
currency. [GOL/] [O/R]
 At 7:57 a.m. (1157 GMT), the Canadian dollar CAD=D3 was
at C$0.9995 to the U.S. dollar, or $1.0005, slightly lower than
Wednesday's close at C$0.9992 to the U.S. dollar, or $1.0008.
 Strauss said he expected the Canadian currency to keep
trading around parity throughout the day, but the market was
awaiting more direction.
 "The attention is now already shifting firmly to next
week's (Bank of Canada) meeting," he said.
 Canadian bond prices moved higher across the curve,
mirroring U.S. Treasuries that rose on Asian buying and after
Federal Reserve Chairman Ben Bernanke cemented the view that
interest rates would stay ultra-low for a protracted period to
support growth. [US/]
  The two-year government bond CA2YT=RR rose 4 Canadian
cents to C$99.225 to yield 1.922 percent, while the 10-year
bond CA10YT=RR added 14 Canadian cents to C$100.410 to yield
3.697 percent.
 (Reporting by Claire Sibonney; Editing by Theodore d'Afflisio)