February 23, 2010 / 2:45 PM / in 8 years

CANADA FX DEBT-Canadian dollar flat as commodities, M&A eyed

 * C$ slightly lower at 95.87 U.S. cents
 * Bonds higher across the curve
 By Claire Sibonney
 TORONTO, Feb 23 (Reuters) -  The Canadian dollar was little changed against its U.S. counterpart on Tuesday but softer commodity prices and the prospect of a cross-border acquisition by Brookfield Asset Management Inc (BAMa.TO) weighed.
 Brookfield is preparing to bid for a large stake in No. 2 U.S. mall owner General Growth Properties Inc GGWPQ.PK, aiming to outbid Simon Property Group Inc (SPG.N), the Wall Street Journal reported on Monday.
 “It’s always hard to tell with M&A (mergers and acquisitions) because you don’t really know what kind of FX they already have on their balance sheet, if they actually really need to buy U.S. dollars,” said Camilla Sutton, a currency strategist at Scotia Capital.
 “So it’s all kind of rumor and speculation but it does point to the potential that there is maybe some flow out there of buying U.S. dollars, selling Canada.”
 As well, the price of oil, which often influences the commodity-linked Canadian dollar, fell more than $1 per barrel to below $79, breaking a five-day rally, helped by expectations of a build in U.S. crude oil stocks. [O/R]
 Gold also eased on Tuesday as the market sought more clarity on U.S. interest rates, looking to this week’s testimony from Federal Reserve Chairman Ben Bernanke for direction. [GOL/]
 At 9:17 a.m. (1417 GMT), the Canadian dollar was at C$1.0431, or 95.87 U.S. cents, slightly down from Monday’s close at C$1.0426 or 95.91 U.S. cents.
 With global equity markets lower, bracing for consumer sentiment data in the United States, North American bond prices were higher across the curve.
 U.S. Treasuries shaved gains but remained positive after a slower annual rate of decline in home prices in December reinforced the housing market’s difficult road to recovery. [US/]
 The two-year Canadian government bond CA2YT=RR added 5 Canadian cents at C$100.280 to yield 1.358 percent, while the 10-year bond CA10YT=RR gained 12 Canadian cents to C$101.020 to yield 3.493 percent.  (Reporting by Claire Sibonney; Editing by Jeffrey Hodgson)                                                      

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