CANADA FX DEBT-C$ softens following U.S., Canadian data

Wed Jun 15, 2011 9:12am EDT
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   * C$ C$0.9714 to the U.S. dollar, or $1.0294
 * Bonds mostly firmer as risk-off sentiment returns
 By Solarina Ho
 TORONTO, June 15 (Reuters) - The Canadian dollar slipped
against its U.S. counterpart on Wednesday, following weak
Canadian manufacturing data and a higher-than-expected rise in
U.S. core consumer inflation.
 U.S. core consumer inflation for May was the largest
increase in nearly three years and was lifted by steep rises in
motor vehicle and apparel prices. [ID:nN15274697]
 Canadian manufacturers saw sales slip 1.3 percent in April,
as expected, reversing much of March's gains as the Japan
earthquake cut off supplies to the auto industry.
 "Today's weak print provides a cautious reminder that the
pace of economic growth is slowing in Canada," said Mazen Issa,
a macro strategist at TD Securities in a research note.
 At 8:44 a.m. (1244 GMT), the currency CAD=D4 stood at
C$0.9714 to the U.S. dollar, or $1.0294, down from Tuesday's
North American finish of C$0.9689 to the U.S. dollar, or
 "We really held in a pretty tight range most of last week,"
said Darcy Browne, Managing Director, Capital Markets Trading,
CIBC, adding that a lot of the money is currently on the
 "We're exposed to the risk-on/risk-off scenarios that's
being presented by either the equity markets or the commodity
markets. There's still a lot of uncertainty."
 Browne expects the currency to continue trading around its
recent range, between C$0.9650 and C$0.9720.
 Bank of Canada Governor Mark Carney is speaking in
Vancouver later this afternoon about the country's housing
market, with investors looking for comments on the impact of
low Canadian interest rates on household borrowing. His
comments are expected to be biased on the hawkish side, which
could support the Canadian dollar later today.
 Any comments on the Canadian dollar and whether the Bank of
Canada believes it is too strong will also be parsed.
 "As much as they don't want the Canadian dollar down here,
I think they realize there's not much they can do about it.
It's more of a global flow aspect to what's going on with the
Canadian dollar. The drivers are not really controlled
domestically," said Browne.
 Canadian bond prices were mostly firmer across the curve as
investors bought back into a cheapened and less risky market.
 The interest rate-sensitive two-year bond CA2YT=RR was
flat, yielding 1.512 percent, while the 10-year bond
CA10YT=RR gained 13 Canadian cents to yield 3.053 percent.
(Editing by Chizu Nomiyama)