CANADA FX DEBT-C$ flat ahead of Canada rate announcement

Tue Apr 21, 2009 8:07am EDT
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 * C$ steady around 80.70 U.S. cents
 * Bank of Canada rate announcement in focus
 * Bond prices follow U.S. Treasury market higher
 By Frank Pingue
 TORONTO, April 21 (Reuters) - The Canadian dollar was flat
versus the U.S. dollar on Tuesday morning ahead of the Bank of
Canada's interest rate announcement and statement that could
make mention of nonconventional policy.
 The uncertainty surrounding the central bank's upcoming
rate announcement has left the Canadian currency lagging gains
made in other commodity-based currencies overnight like the
Australian and New Zealand dollars.
 The bank is expected to leave its overnight rate steady at
0.50 percent when it releases its statement at 9:00 a.m. (1300
GMT), and traders will watch for any talk of quantitative or
credit easing. [ID:nN16520541] and [ID:nTOR004441]
 "In (the Canadian dollar) we haven't had that bounce that
some of the other riskier currencies had overnight," said Adam
Cole, currency strategist at RBC Capital Markets in London.
 "I think that is probably the market setting itself up for
some risk that the bank says at least something on Q/E today,
though obviously we expect most of the details on Thursday."
 The Bank of Canada will lay out a framework for "credit and
quantitative easing" when it releases is next Monetary Policy
Report on Thursday.
 At 7:35 a.m. the Canadian dollar was at C$1.2390 to the
U.S. dollar, or 80.71 U.S. cents, off slightly from C$1.2385 to
the U.S. dollar, or 80.74 U.S. cents, at Monday's close.
 Canadian bond prices, with no domestic data to influence a
move, were flat to higher across the curve alongside the bigger
U.S. Treasury market on U.S. bank sector concerns.
 The move into more secure bonds extended gains from the
previous session when Bank of America BAC.N reported a jump
in non-performing assets, raising uncertainties about future
writedowns at a time when investors are already worried about
the results of the stress tests on the banking industry.
 (Editing by Theodore d'Afflisio)