CANADA FX DEBT-C$ softens, as U.S. data, flat commodities weigh
* C$ slightly down at 95.71 U.S. cents
* Greenback firm after U.S. housing data
* Bonds lower across the curve
By Claire Sibonney
TORONTO, Feb 17 (Reuters) - The Canadian dollar fell slightly against its U.S. counterpart on Wednesday, as the greenback received a boost from U.S. housing data and flat prices for gold and other base metals offered little support.
The U.S. dollar also rose against the Japanese yen and euro, helped by a report that showed U.S. housing starts rebounded more strongly than expected in January. [ID:nN16228624].
The price of oil, which often influences the direction of Canada's dollar, rose towards $78 a barrel. But gold and other base metals such as aluminum, nickel and zinc were fairly flat, curbing risk appetite for the commodity-linked currency. [O/R] [GOL/]
"The message from the commodity markets is there is no real strong follow-through of yesterday's significant gains ... providing no clear direction for dollar/CAD," said Matthew Strauss, senior currency strategist at RBC Capital Markets.
Strauss said the currency's reaction to a 0.7 percent increase in Canada's December wholesale trade figures was subdued as the headline was only slightly better than expectations. [ID:nSCLHDE60Y]
Looking ahead to the rest of the day's events, the currency market will be paying close attention to the FOMC minutes from Jan. 26-27 meeting due at 2 p.m. ET (1900 GMT), looking for hints of a Fed exit strategy. [ID:nN16236616]
"The market will be focusing on any detailed discussions regarding language (about) interest rates remaining low for an extended period," said Strauss.
The Canadian dollar would likely see some weakness on the back of broad-based U.S. dollar strength on any signs that point a U.S. rate hike sooner rather than later, he added.
At 9:19 a.m. (1419 GMT) the Canadian dollar was at C$1.0448, or 95.71 U.S. cents, down from Tuesday's close at C$1.0435 to the U.S. dollar, or 95.83 U.S. cents. The currency hit a three-week high on Tuesday.
With global equities higher, Canadian bond prices were lower across the curve, following U.S. Treasuries, which fell as surprisingly strong housing starts data helped to assuage worries over the sluggish pace of economic recovery. [US/]
The two-year Canadian government bond CA2YT=RR was down 4 Canadian cents at C$100.325 to yield 1.337 percent, while the 10-year bond CA10YT=RR fell 45 Canadian cents to C$102.000 to yield 3.495 percent. (Editing by Jeffrey Hodgson)
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