3 Min Read
* C$ higher, but stuck in tight range
* Canadian retail sales top estimates
* Bond prices give back recent gains
By Frank Pingue
TORONTO, July 22 (Reuters) - The Canadian currency was up slightly versus the U.S. dollar on Wednesday, helped in part by strong domestic retail sales data and a recent string of upbeat comments from central bankers.
Helping boost the Canadian dollar back toward the near six-week high it hit on Monday was data that showed Canadian retail sales rose 1.2 percent in May from April, which topped expectations for a gain of 0.5 percent. [ID:nOTT001664]
The gain follows a more optimistic statement from the Bank of Canada on Tuesday, a more upbeat Australian central bank and recent talk of economic growth by the Bank of England.
"We still think it's probably a sell on rallies and so we have to wait and see what the risk appetite is for the rest of the day here," said Shaun Osborne, chief currency strategist at TD Securities.
"We had a pretty good run of equity market gains, positive comments from central bankers and earnings have generally been a bit better than expected ... so I think the risk appetite is simmering under the surface and that should keep the Canadian dollar fairly well supported."
At 9:20 a.m. (1320 GMT), the Canadian unit was at C$1.1049 to the U.S. dollar, or 90.51 U.S. cents, up from C$1.1071 to the U.S. dollar, or 90.33 U.S. cents, at Tuesday's close.
But the move was held in check and the currency stuck to a tight range given a slide in global stocks and nagging concerns over a warning of rising unemployment from U.S. Federal Reserve Chairman Ben Bernanke on Tuesday.
On Tuesday the Canadian currency rallied to C$1.0965 to the U.S. dollar, or 91.19 U.S. cents, which was its highest level since June 11. But it gave back all the gains in the aftermath of the Bernanke comments.
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.
BONDS PRICES ALL LOWER
Canadian bond prices were down across the curve given the combination of the better-than-expected retail sales data and dealers who opted to book profits after the gains recorded in Tuesday's session.
With no major Canadian data due for the rest of the session, domestic bond prices are expected to track moves in the bigger U.S. Treasury market.
The two-year Canada bond was down 4 Canadian cents at C$100.07 to yield 1.211 percent, while the 10-year bond slipped 20 Canadian cents to C$102.55 to yield 3.442 percent.
The 30-year bond dropped 80 Canadian cents to C$116.50 to yield 4.010 percent. The 30-year U.S. Treasury bond yielded 4.404 percent. (Editing by Jeffrey Hodgson)