CANADA FX DEBT-C$ falls, bonds firm after Bernanke testimony

Wed Jul 21, 2010 3:50pm EDT
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* C$ falls to 95.37 U.S. cents

* Bonds prices firm across curve

* Bernanke says Fed to act if soft U.S. recovery falters (Updates to late afternoon after Bernanke testimony)

By Ka Yan Ng

OTTAWA, July 21 (Reuters) - The Canadian dollar fell from close to a one-week high against the U.S. currency on Wednesday as equity markets and oil prices extended their declines after the U.S. Federal Reserve said the U.S. economy faces "unusually uncertain" prospects.

U.S. central bank Chairman Ben Bernanke, in prepared testimony to the U.S. Senate Banking Committee, also said that the Fed was ready to take further steps to bolster growth if needed. [ID:nWALLIE6DU]

Bernanke's remarks were largely in line with the minutes of a recent bank policy meeting, but today's comments served to underscore market worries about the global economic outlook and further soured investor sentiment towards riskier assets.

The Canadian dollar traced declines on North American equity markets, which skidded more than 1 percent, as well as the softening price of oil.

At 3:20 p.m. (1920 GMT), the currency CAD=D4 was at C$1.0485 to the U.S. dollar, or 95.37 U.S. cents, down from Tuesday's finish at C$1.0448 to the U.S. dollar, or 95.71 U.S. cents.   Continued...