CANADA FX DEBT-C$ falls as world stocks, commodities weaken

Mon Sep 21, 2009 9:48am EDT
 
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 * C$ down at 92.70 U.S. cents
 * Sagging world stocks hit investor risk appetite
 * Bonds edge up, but investors brace for heavy issuance
 (Adds bond activity, updates prices)
 TORONTO, Sept 21 (Reuters) - The Canadian dollar edged
lower against the U.S. currency on Monday morning as commodity
prices fell and lower global equities diminished investor
thirst for riskier assets.
 Stock markets overseas .MIWD00000PUS fell on Monday,
pressured by lower energy and commodity prices and caution
ahead of the G20 summit this week and a two-day U.S. Federal
Reserve meeting. [MKTS/GLOB]
 The Fed is likely to hold rates steady at its meeting,
which starts on Tuesday, but markets are still eager to know if
bank will soon unwind some super-accommodative programs due to
a pickup in economic data.
 Lower commodity prices were a driver of the Canadian dollar
early in the day, reflecting Canada's resource-based economy.
The price of oil CLc1, a key Canadian export, fell below $70
a barrel, while gold fell below $1,000 an ounce and base metals
were largely weaker. [O/R] [GOL/] [MET/L]
 "We've had a fairly significant correction in commodities
and equities," said David Bradley, director of foreign exchange
trading, Scotia Capital. "That's basically what's led the
Canadian dollar weaker."
 At 9:10 a.m. (1310 GMT), Canada's dollar was at C$1.0800 to
the U.S. dollar, or 92.59 U.S. cents, down from C$1.0697 to the
U.S. dollar, or 93.48 U.S. cents at Friday's close.
 BONDS EDGE UP
 Canadian bond prices inched up across the curve, reflecting
cautious buying ahead of the Fed policy meeting and the G20
meeting.
 Investors are also on guard for a near record $112 billion
in shorter-dated Treasury issues due this week.
 The two-year bond CA2YT=RR rose 4 Canadian cents to
C$99.49 to yield 1.267 percent, while the 10-year bond
CA10YT=RR gained 25 Canadian cents to C$103.15 to yield 3.365
percent. The 30-year bond CA30YT=RR advanced 35 Canadian
cents to C$118.65 to yield 3.893 percent.
 A report on Monday showing foreign investors reduced their
overall holdings of Canadian securities in July had little
impact on the market. The report also showed that foreign
investment in bonds so far this year is at record-breaking
levels.
 (Reporting by Jennifer Kwan and Ka Yan Ng; editing by Peter
Galloway)