April 20, 2009 / 12:13 PM / in 8 years

CANADA FX DEBT-C$ skids to lowest level in a week

 * Economic concerns weigh on investor sentiment
 * Canadian dollar falls to 81.31 U.S. cents
 * Bond prices comfortably higher across curve
 By Frank Pingue
 TORONTO, April 20 (Reuters) - The Canadian dollar fell to its lowest level in a week on Monday as investors moved into the perceived safety of the U.S. greenback ahead of a slew of corporate earnings this week that could be gloomy.
 The decline in the Canadian dollar also came ahead of the Bank of Canada’s next scheduled interest rate announcement on Tuesday, when it is expected to leave its overnight rate steady at 0.50 percent [ID:nN16520541]
 At 7:35 a.m. (1135 GMT), the Canadian unit was at C$1.2298 to the U.S. dollar, or 81.31 U.S. cents, its lowest level since April 13. That was also down from C$1.2150 to the U.S. dollar, or 82.30 U.S. cents, at Friday’s close.
 Another drag on the domestic currency was coming from the price of oil, a key Canadian commodity and export, which fell more than 3 percent giving growing caution about the pace any any economic recovery. [ID:nSYD428032]
 “It’s broad-based selling again of your commodity and cyclical currencies with risk sentiment changing,” said Matthew Strauss, senior currency strategist at RBC Capital Markets.
 “There’s concern going into the week as we get financial reports more from the real economy than just financials and the results might come in weaker than expected and we could see continued weakness in the real side of the economy.”
 Last week, the quarterly earnings reports picked up steam in the United States, including better-than-expected profits from U.S. banks Citigroup (C.N) and JP Morgan (JPM.N).
 Canadian bond prices were higher across the curve alongside the bigger U.S. Treasury market with investors looking for more secure assets ahead of a slew of earnings this week that could set a different tone.
 (Editing by Chizu Nomiyama)                               

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