CANADA FX DEBT-C$ edges up from 7-week low in thin trade

Thu Nov 24, 2011 5:06pm EST
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  * C$ ends at C$1.0469 to the US$, or 95.52 U.S. cents
  * Canada bond prices ease across the curve
 (Updates to close, adds comments)
 By Jennifer Kwan
 TORONTO, Nov 24 (Reuters) - The Canadian dollar ticked
higher against the greenback on Thursday in holiday-thinned
trade but didn't stray far from the seven-week low it hit the
day before on fears the euro zone crisis was spreading to
 A meeting of the leaders of Germany, France and Italy on
Thursday failed to provide relief from the jolt that rattled
the market on Wednesday when a weak German government bond
auction fueled fears that even the safe-haven status of
Europe's biggest economy could be under threat. [nL5E7MN3J8]
 "I don't think the market got any warm, fuzzy feelings
about the possibility of a quick resolution to all the debt
woes in Europe," said Steve Butler, director of foreign
exchange trading at Scotia Capital.
 The Canadian currency CAD=D4 touched a low of C$1.0493 to
the U.S. dollar, or 95.30 U.S. cents, which was below its
Wednesday close of C$1.0485 against the greenback, or 95.37
U.S. cents.
 But by the close on Thursday the Canadian dollar had worked
its way up to C$1.0469, or 95.52 U.S. cents, in trading made
thin by the U.S. Thanksgiving Day holiday.
 "Every time we see Canada weaken off we seem to find some
levels where there's reasonably good supply. We haven't been
able to crack this C$1.05 level," Butler said.
 "Anybody who's been long U.S. dollars going into this
holiday weekend was probably a little quick to take some
profits off the table."
 The euro also fell to a seven-week low against the
greenback on Thursday after German Chancellor Angela Merkel
said she still does not think common euro zone bonds are
 David Watt, senior currency strategist at RBC Capital
Markets, said he expected more of the same type of muted action
on Friday.
 "With U.S. markets effectively closed, all the major
players out of the market, it is going to be relatively thin,
relatively whippy," he said.
 "But again, we've seen today that markets have been sold
off so frequently that the thin markets will take that as an
opportunity to take some profits on shorts, and we'll wait and
see how things go when liquidity returns."
 With lack of direction from the U.S. Treasury market,
Canadian government bond prices eased across the curve, with
Canada's two-year bond CA2YT=RR down 3 Canadian cents to
yield 0.912 percent, and the 10-year bond CA10YT=RR down 10
Canadian cents to yield 2.051 percent.
 (Additional reporting by Andrea Hopkins and Claire Sibonney;
editing by Peter Galloway)