CANADA FX DEBT-C$ slumps as U.S. data, Fed lift greenback

Wed Feb 17, 2010 4:40pm EST
 
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 * 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)