CANADA FX DEBT-C$ edges down, technical levels seen tested

Tue May 17, 2011 8:28am EDT
 
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 * C$ edges down to C$0.9751 to the U.S. dollar, or $1.0255
 * Key technical range eyed at C$0.9770-C$0.9800
 * Bond prices little changed
 By Ka Yan Ng
 TORONTO, May 17 (Reuters) - Canada's dollar edged lower
against the U.S. currency on Tuesday morning, eyeing another
run at a key technical level that would retest its weakest in
more than seven weeks.
 The Canadian unit slipped as low as C$0.9771 against the
U.S. currency in the previous session, its lowest since March
29, nearing a major technical area between C$0.9770-C$0.9800.
 "That's an important range of levels," said Jack Spitz,
managing director of foreign exchange at National Bank
Financial. If broken, the currency would likely move into the
C$0.98 area and weaken further against the U.S. currency.
 "The market took a look at it yesterday and rejected it."
 At 8:10 a.m. (1210 GMT), the Canadian dollar CAD=D4 was
at C$0.9751 to the U.S. dollar, or $1.0255, down slightly from
the North American session at C$0.9742 to the U.S. dollar, or
$1.0265.
 The currency was seen taking its cue from the euro, which
pulled away from a seven-week low against the greenback, but
remained vulnerable on the downside as investors looked at
opportunities to trim bullish bets while uncertainty over Greek
debt lingers. [ID:nLDE74G184] [FRX/]
 "What we're seeing is Canada taking its cue...from global
macro events and data. The euro itself continues to be
vulnerable," said Spitz.
 "Look at $1.40 in euro as a motivator for dollar/Canada
price action."
 Canadian securities transactions figures for March are seen
having little impact on the currency on Tuesday. Instead,
traders are looking ahead to two big reports -- inflation for
the month of April and retail sales for March -- coming at the
end of the week.
 Canadian government bonds were little changed, mirroring
U.S. Treasuries. Canada's two-year bond CA2YT=RR was up 1
Canadian cent to yield 1.662 percent, while the 10-year bond
CA10YT=RR edged up 4 Canadian cents to yield 3.180 percent.
 (Reporting by Ka Yan Ng, Editing by Chizu Nomiyama)