CANADA FX DEBT-C$ up ahead of Bank of Canada rate decision

Tue Jul 21, 2009 7:57am EDT
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 * C$ a touch higher, sticks above 90 U.S. cents
 * Bank of Canada expected to leave rates steady
 * Bond prices steady at mostly unchanged levels
 By Frank Pingue
 TORONTO, July 21 (Reuters) - Canada's currency was a touch
higher versus the U.S. dollar on Tuesday ahead of a Bank of
Canada interest rate decision that may include renewed economic
forecasts and mention of the domestic currency.
 At 7:45 a.m. (1145 GMT) the Canadian unit was at C$1.1046
to the U.S. dollar, or 90.53 U.S. cents, up from C$1.1068 to
the U.S. dollar, or 90.35 U.S. cents, at Monday's close.
 While higher, the move paled in comparison to the domestic
currency's recent charge, which included a rise on Monday to
its highest level since June 12 before backing off slightly.
 "It's not getting any real direction from asset markets,
which has been obviously the main driver recently," said Adam
Cole, global head of FX strategy at RBC Capital Markets in
London. "It's waiting for the BoC I think primarily, and there
is some uncertainty over whether or not they will mention the
currency in the statement in particular."
 The central bank is expected to stick to its conditional
pledge and keep rates at the current near-zero level when it
releases its decision at 9:00 a.m., according to a recent
Reuters poll of Canada's primary dealers. [ID:nN17484031]
 But plenty of attention will be directed at the statement
that accompanies the decision to see if the central bank offers
an updated view on the Canadian dollar.
 In its June statement, the bank said a strong currency
could offset positive factors such as improved financial
conditions and commodity prices. [ID:nN0479627]
 The Canadian dollar is up about 18 percent since it tumbled
to a four-year low of C$1.3066 to the U.S. dollar, or 76.53
U.S. cents, in early March.
 Canadian bond prices were hovering around the break-even
level ahead of the Bank of Canada announcement.
 (Editing by Padraic Cassidy)