Canada dollar rises, but rangebound, bonds up
By John McCrank
TORONTO (Reuters) - The Canadian dollar rose against the U.S. dollar on Wednesday but stayed within a tight range, as illiquid markets before the holidays kept investors from making any big moves.
Bond prices rallied on more fallout from the crisis in the U.S. subprime mortgage sector and credit markets.
The Canadian dollar closed at C$1.0033 to the U.S. dollar, or 99.67 U.S. cents, up from C$1.0055 to the U.S. dollar, or 99.45 U.S. cents, at Tuesday's close.
The currency spent the entire North American session between 99.25 U.S. cents and 99.83 U.S. cents.
"The Canadian dollar has been stuck in a bit of a range here, but it does seem like it wants to do a little bit better," said Steve Butler, director of foreign exchange trading at Scotia Capital.
There has been steady interest in the Canadian dollar over the past several days, prompting Butler to suggest that the correction since the currency hit its modern-day high of US$1.1039 in November may be over.
"The fundamentals are still generally pretty good in Canada and I think the market is realizing that," he said.
But as traders, mutual fund managers, and corporate executives head off for the holidays, the market is becoming more illiquid, so any surprising data or market-moving news could magnify moves in the currency. Continued...