CANADA FX DEBT-C$ edges up ahead of BoC rate decision

Tue Apr 20, 2010 8:16am EDT
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 * C$ at C$1.0126, or 98.76 U.S. cents
 * Bonds lower across the curve
 By Claire Sibonney
 TORONTO, April 20 (Reuters) - The Canadian dollar rose
slightly against its U.S. counterpart on Tuesday, boosted by
strong U.S. corporate earnings and a rally in commodity prices
ahead of the Bank of Canada's interest rate announcement.
 All 12 of Canada's primary dealers surveyed last week
expect the central bank to hold rates steady in its
announcement expected at 9 a.m. (1300 GMT). [CA/POLL]
 But market players are hesitant to make big moves one way
or the other before getting a fresh sense of the bank's
direction, and will closely scrutinize its accompanying policy
statement for hints of timing on the next rate hike.
 The bank has conditionally pledged to keep its key rate at
its current ultra-low 0.25 percent level until the end of June
so long as inflation remains tame. [ID:nN15256700]
 "The Bank of Canada is definitely helping to support CAD
going into the decision. Most analysts are looking for
something a little more optimistic than what we've seen in the
past," said Jacqui Douglas, currency strategist at TD
 "We're looking for upward revisions to GDP growth, probably
indications that inflation will return to target sooner and
markets are wondering whether the Bank of Canada will signal a
rate hike as soon as June."
 However, Douglas anticipated the central bank will likely
keep a cautious tone and keep its options open with two more
inflation reports due before its June decision.
 At 8:01 a.m., the Canadian dollar CAD=D4 was at C$1.0126
to the U.S. dollar, or 98.76 U.S. cents, up from Monday's close
at C$1.0148 to the U.S. dollar, or 98.54 U.S. cents.
 Riskier currencies and global equities were buoyed by
positive earnings from Goldman Sachs (GS.N: Quote), which deflected
attention away from the U.S. Securities and Exchange
Commission's fraud charge against it. [.N]
 Oil, gold and base metal prices all rose, which added
further support to the commodity-linked currency. [O/R] [GOL/]
 Canadian bond prices were slightly lower, following U.S.
Treasuries which were under pressure as a rebound in European
stocks on the back of upbeat corporate results whittled bids
for lower-risk government debt. [US/]
 The two-year government bond CA2YT=RR edged 3 Canadian
cents lower at C$99.365 to yield 1.848 percent, while the
10-year bond CA10YT=RR was down 4 Canadian cents at C$100.680
to yield 3.662 percent.
 (Editing by Jeffrey Hodgson)