Canada dollar flat in lackluster trade, bonds fall

Wed Jul 16, 2008 5:12pm EDT
 
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* Canadian dollar closes flat against greenback

* Bank of Canada Monetary Policy Report Update in focus

* Bond prices fall on rise in stocks, U.S. inflation

By John McCrank

TORONTO, July 16 (Reuters) - The Canadian dollar was flat against the U.S. dollar in lackluster trading on Wednesday as investors looked forward to the Bank of Canada's Monetary Policy Report Update on Thursday for more insight into its economic outlook.

Canadian bond prices fell as a rally in the equity markets lessened the safe-haven bid for government debt.

The Canadian unit closed at C$1.0022 to the U.S. dollar, or 99.78 U.S. cents, barely up from C$1.0023 to the U.S. dollar, or 99.77 U.S. cents, at Tuesday's close.

The currency stayed within a narrow range of 99.97 Canadian cents and C$1.0020, with no real impetus to give it direction.

"It's been fairly muted overall, but I think what's encouraging is that yesterday, when we saw the U.S. dollar pare back some of its losses against other currencies, it didn't really do so against the Canadian dollar," said Gareth Sylvester, currency strategist at HIFX Plc in San Francisco.   Continued...