CANADA FX DEBT-C$ hits 2010 low after weak retail sales data

Fri Jan 22, 2010 9:28am EST
 
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 * Touches 2010 low of C$1.0573, or 94.58 US cents
 * Markets still shaky after Obama bank rule proposals
 * Bond prices mostly flat across curve
 By Jennifer Kwan
 TORONTO, Jan 22 (Reuters) - The Canadian dollar hit its
lowest level this year against the U.S. currency on Friday
after retail sales data fell more than market expectations,
sparking concern about the strength of consumer demand.
 The currency touched a low of C$1.0573 to the U.S. dollar,
or 94.58 U.S. cents, after data showed retail sales for
November fell by 0.3 percent from October, pushed down in part
by unseasonably warm weather that cut demand for winter
clothing and shoes. Market analysts polled by Reuters had
predicted a 0.2 percent fall. [ID:nN22227089]
 "The numbers were weaker than expected across the board,"
said George Davis, chief technical strategist at RBC Capital
Markets.
 "We're seeing a little bit of faltering on the part of the
consumer. That's becoming a little bit of concern."
 But the currency had been weak ahead of the data with
global equities, typically a barometer of risk appetite,
knocked lower on the lingering effects of U.S. President Barack
Obama's proposal to put stricter limits on financial
institutions' risk-taking. [MKTS/GLOB] [.N] [ID:nN21200151]
 "The risk backdrop isn't very favorable right now," said
Davis.
 "There's a lot of uncertainty with respect to Obama's plans
to limit the activity of the banks in the U.S. Commodities are
under pressure, stocks are under pressure so that's weighing on
the Canadian dollar," said Davis.
 At 9:12 a.m. (1412 GMT), the Canadian dollar was at
C$1.0558 to the U.S. dollar, or 94.71 U.S. cents, down from
Thursday's finish at C$1.0514 to the U.S. dollar, or 95.11 U.S.
cents.
 The price of oil, a key Canadian export, slipped to around
$76 a barrel, while gold prices were also slightly softer. Both
commodities exert a strong influence on the Canadian dollar.
[O/R] [GOL/]
 Government bond prices were largely flat as investors took
pause after a rally in prices in the previous session, said
Davis.
 (Editing by Jeffrey Hodgson)