CANADA FX DEBT-C$ edges up as oil cuts losses, data supports

Fri Jun 18, 2010 10:46am EDT
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 * C$ ticks higher to 97.48 U.S. cents
 * Bond prices edge lower across the curve
 * Canada May leading indicator rises 0.9 pct
 (Adds details)
 By Ka Yan Ng
 TORONTO, June 18 (Reuters) - The Canadian dollar edged
higher on Friday as oil prices turned positive and
stronger-than-forecast Canadian economic data and moderate
gains on equity markets provided support.
 The price of oil, often a driver of Canada's
commodity-linked currency, pushed above $77 a barrel to erase
early losses. Oil prices were pressured early in the day by a
warning from a Chinese central bank adviser that economic
growth was expected to slow in the second half of this year.
 Soft U.S. weekly jobless claims and regional factory
activity data released on Thursday had also weighed on global
recovery hopes. [ID:nTST000214]
 "(Crude has) come up a long way from its lows," said Firas
Askari, head of foreign exchange trading at BMO Capital
 "Canada's underperformance is perceived to be overdone, I
think, and what you're seeing here probably is a little bit of
 At 10:15 a.m. (1415 GMT), the Canadian dollar was at
C$1.0259 to the U.S. dollar, or 97.48 U.S. cents, up from
Thursday's finish at C$1.0270 to the U.S. dollar, or 97.37 U.S.
 Support also came from early modest gains on North American
equity markets  [.TO] [.N] and from figures showing Canada's
composite leading indicator rose by 0.9 percent in May from
April. The increase, the 12th straight gain, was greater than
the 0.7 percent advance expected by market operators.
 "Generally, the Canadian dollar story is a good story.
We've had relatively weakish numbers outside of today this
week," said Askari, noting housing figures earlier in the week
were particularly disappointing.  [ID:nN16194833]
 Figures on Thursday showed the value of Canadian wholesale
trade in April dipped unexpectedly, suggesting a cooler tempo
of economic growth, while TD Economics said the domestic
economy was set for a bumpy, "pothole" recovery.
  Investors largely shrugged off a speech by Bank of Canada
Governor Mark Carney, who cautioned investors again on Friday
not to take another interest rate hike for granted, saying
volatile global conditions mean no particular path for monetary
policy is preordained. [ID:nN18116394]
 The speech was nearly identical to one Carney gave on June
16. [ID:nN16178696]
 Canadian government bond prices posted slim losses,
influenced by softer U.S. Treasuries on easing euro zone debt
concerns. [US/]
 The two-year government bond CA2YT=RR dipped 4 Canadian
cents to yield 1.742 percent, while the 10-year bond
CA10YT=RR edged down 10 Canadian cents to yield 3.315
 (Reporting by Ka Yan Ng; editing by Peter Galloway)