3 Min Read
* C$ closes down at C$0.9897 vs US$, or $1.0104
* Bonds little changed across curve (Updates to close, adds details, quotes)
By Claire Sibonney
TORONTO, Feb 15 (Reuters) - Canada's dollar edged a bit lower against the greenback on Tuesday, tugged down by a decline in U.S. stocks and slower than expected U.S. retail sales, but it stayed snugly confined in its recent tight range.
Oil prices also exerted a bit of downward pressure on the currency, pulling back as fears over Middle East unrest eased and as uncertainty over Chinese monetary policy mounted. [MKTS/GLOB]
Oil prices and U.S. stock prices typically have been big drivers of Canadian dollar movement, but since the start of the year they have failed to push it much out of its range, and the market has been hard pressed to find alternative catalysts.
The currency CAD=D4 on Tuesday moved in the familiar 50-odd basis point range between C$0.9903 versus the U.S. dollar and C$0.9851.
"It looks like there's a little bit of risk being taken off with the uninspiring U.S. numbers that came out," said John Curran, senior vice president at CanadianForex.
The data showed growth in sales at U.S. retailers slowed in January, partly due to harsh winter weather across much of the country, although the trend continued to support a modest acceleration in economic growth. [ID:nN15164973]
"You've still got quite a bit of data to plow through for the rest of the week, so people may be just hedging their bets here," Curran said, noting that U.S. inflation figures for January are out on Thursday and Canadian inflation data for the same month is due on Friday. On Wednesday, U.S. Federal Open Market Committee meeting minutes are out.
The Canadian dollar ended the North American session at C$0.9897 to the U.S. dollar, or $1.0104, down a bit from C$0.9885 to the U.S. dollar, or $1.0116, at Monday's close.
"The long-term trend is still for Canadian strength," Curran said, although warning that the currency will stay "dead" unless it can push beyond resistance at the year's high of C$0.9830, or fall through support around C$1.0050, near the 2011 low.
"USD/CAD just does not want to break out of its recent ranges," David Watt, senior fixed income and currency strategist at RBC Captial Markets, said in a note to clients. He added that Canada's January inflation report "could add some spice to some bland USD/CAD trading."
The two-year Canadian government bond CA2YT=RR was off half a Canadian cent to yield 1.930 percent, while the 10-year bond CA10YT=RR edged 5 Canadian cents higher to yield 3.481 percent. (Editing by Peter Galloway)