CANADA FX DEBT-C$ pares losses after U.S. data, bonds rise

Thu Sep 23, 2010 9:35am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

   * C$ recovers a bit, but still down at 96.55 U.S. cents
 * Bonds firm after data
 * Latest weekly U.S. jobless claims unexpectedly rise
 (Adds details)
 TORONTO, Sept 23 (Reuters) - The Canadian dollar recovered
from a two-week low against the U.S. dollar on Thursday, while
bonds were firmer, after the latest weekly U.S. jobless claims
unexpectedly rose, suggesting continued labor market softness.
 The Canadian dollar CAD=D3 slipped to a two-week low of
C$1.0380 to the U.S. dollar, or 96.34 U.S. cents, after initial
claims for state unemployment benefits increased 12,000 to a
seasonally adjusted 465,000, breaking two straight weeks of
declines. For details, please see [ID:nN23129887]
 Initial claims were expected to remain steady on the
previous week's figure of 450,000. The U.S. Labor Department
revised the prior week's figure up to 453,000.
 But by 9:15 a.m. (1315 GMT), the currency had recovered a
bit of the losses to trade at C$1.0357 to the U.S. dollar, or
96.55 U.S. cents, although it was still lower than Wednesday's
close at C$1.0298 to the U.S. dollar, or 97.11 U.S. cents.
 Still, the currency has been largely stuck in a range for
the last week or so, said Shaun Osborne, chief FX strategist at
TD Securities, noting that while the U.S. dollar has looked
"quite soft elsewhere", the Canadian dollar has held in
"remarkably well."
 "We generally think the C$1.02-C$1.03 should hold. It's
been our view for quite some time that this is really the base
of the market at the moment," he said. "The bargain hunting
from the corporate sector continues to be a strong motivator it
seems of this support around the C$1.02 point."
 "But with the door being flung open to some more
(quantitative easing by the Federal Reserve) in the U.S. we
have to realize that the upside might not be as extensive
previously. We were looking for C$1.10-C$1.12 towards the end
of the year. We're lowering our sights for dollar/Canada in the
short-term point of view."
 A test of C$1.04 could be in the cards, he added.
 Earlier this week, the U.S. Federal Reserve signaled it was
ready to inject more money into the U.S. economy to shore up
the recovery and avert a damaging downward spiral in prices.
 Canadian government bonds were higher across the curve
after the data, alongside their U.S. counterparts.
 The two-year government of Canada bond added 5 Canadian
cents to yield 1.391 percent, while the 10-year bond gained 50
Canadian cents to yield 2.810 percent.
 (Reporting by Ka Yan Ng; Editing by Chizu Nomiyama)