4 Min Read
* C$ slightly down at 95.68 U.S. cents
* Greenback firm after U.S. housing data, Fed minutes
* Bonds lower across the curve as stocks gain
* High demand for 30-year bond auction (Updates to North American close, adds details, quotes)
By Claire Sibonney
TORONTO, Feb 17 (Reuters) - The Canadian dollar sagged against its U.S. counterpart on Wednesday as the greenback received a boost from upbeat U.S. housing data and Federal Reserve minutes, while euro zone woes weighed on riskier currencies.
The U.S. dollar also rose against the Japanese yen and euro, while flat prices for gold and other base metals offered little support for commodity-linked plays. [FRX/] [GOL/]
"The geopolitical noise out of the euro zone continues to weigh on sentiment and from a global risk perspective the market is continuing to be bid for the U.S. dollar across the board," said Jack Spitz, managing director of foreign exchange at National Bank Financial.
Greece's fiscal woes have shaken the euro zone and European Union leaders have pledged support for its deficit cutting plans but stopped short of financial aid last week. [ID:nLDE61G2HO]
U.S. housing starts, which rose to a six-month high in January, as well as optimistic comments on the economy from the Federal Open Market Committee's January meeting minutes, were also key drivers behind the greenback's sharp rise. [ID:nN17114831] [ID:nWEQ003794]
The Canadian dollar finished at C$1.0452, or 95.68 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.
The price of oil, which often influences the Canadian currency, rose slightly, holding above $77 a barrel, but struggled under pressure from a stronger U.S. dollar. [O/R]
STOCKS UP, BONDS DOWN
With North American stocks boosted by positive economic data and company earnings, Canadian bond prices were lower across the curve, mirroring losses in U.S. Treasuries. U.S. debt fell further after the FOMC minutes suggested the Fed will soon begin withdrawing its monetary stimulus. [US/]
Even so, Canada's 30-year government bond met healthy demand, in line with other recent auctions, as relative safety has been sought in the country's debt amid woes elsewhere. [ID:nN17130633]
"International demand ... continues because there's some nervousness about profligate governments, and Canada isn't really one of those," said Mark Chandler, a fixed income strategist at RBC Capital Markets.
The two-year Canadian government bond CA2YT=RR was down 5 Canadian cents at C$100.315 to yield 1.342 percent, while the 10-year bond CA10YT=RR fell 27 Canadian cents to C$102.180 to yield 3.473 percent.
Canadian bonds outperformed their U.S. counterparts, with the difference between 10-year yields widening about 27 basis points from 21.5 basis points on Tuesday. (Editing by Jeffrey Hodgson)