CANADA FX DEBT-C$ softer as oil dips, bounces from overnight low

Tue Nov 24, 2009 9:51am EST
 
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 * C$ slightly softer around C$1.0584 per US$
 * Market awaits minutes from Fed's Nov. meeting
 * Bond prices hold higher across the curve
 By Frank Pingue
 TORONTO, Nov 24 (Reuters) - The Canadian dollar was lower
versus the U.S. currency on Tuesday, hurt by a weaker oil price
and soft equity markets, but some upbeat overseas data helped
it bounce off an overnight low.
 Overnight the Canadian currency fell as low as C$1.0645 to
the U.S. dollar, or 93.94 U.S. cents, on the heels of a rally
on Monday that snapped four-session skid in the currency.
 It staged a rebound when a German business sentiment survey
came in better than expected, reaching its highest level since
August 2008, to offset concerns about the country's banking
sector. [ID:nGEE5AN19N]
 "The report came out stronger than expected and essentially
caused a nice little rally in the euro which in turn generated
some broader-based U.S. dollar weakness," said George Davis,
chief technical strategist at RBC Capital Markets.
 "Since then we've really been in a bit of a holding pattern
where the market seems a little bit unsure as to whether it
wants to try and continue to move lower or start to break back
to the topside."
 At 9:30 a.m. (1430 GMT), the Canadian unit was at C$1.0584
to the U.S. dollar, or 94.48 U.S. cents, down from C$1.0558 to
the U.S. dollar, or 94.71 U.S. cents, at Monday's close.
 The price of oil, a major Canadian export, dropped below
$77 a barrel on Tuesday ahead of data expected to show crude
inventories rose in the United States. [O/R]
 With no major Canadian data due until Friday's currency
account report for the third quarter, investors are expected to
shift their focus to the U.S. Federal Reserve, which will
release minutes of its Nov. 3-4 meeting at 2:00 p.m. (1900
GMT).
 Markets will look at the report for hints on when and how
the Fed will draw down extraordinary economic support measures.
The minutes also include economic projections.
 "People will be watching that for any clues as to what the
Fed's insight is into the economy as things unfold here," said
Davis. "It will certainly garner some interest but I think in
terms of broader themes people will continue to focus on the
equity markets."
 Toronto's main stock index was lower shortly after the
opening bell on Tuesday as strength in banking stocks stemming
from firm Bank of Montreal BMO.TO quarterly results were not
enough to offset weakness in the weighty commodity-based
groups. [.TO]
 Domestic bond prices were a touch higher across the curve
as data that showed the U.S. economy grew slower than initially
thought in the third quarter triggered demand for more secure
assets like government debt.
 In its second reading of third-quarter GDP, the Commerce
Department said the U.S. economy grew at a 2.8 percent annual
rate, rather than the 3.5 percent pace it had estimated last
month. [ID:nN23258482]
 In issuance news, the province of Ontario will sell at
least 1 billion euros of a new 10-year benchmark bond,
according to IFR, a Thomson Reuters service.
 The two-year bond CA2YT=RR was up 3 Canadian cents at
C$100.03 to yield 1.235 percent, while the 10-year bond
CA10YT=RR rose 7 Canadian cents to C$103.15 to yield 3.360
percent.
 (Editing by Jeffrey Hodgson)
 ((frank.pingue@thomsonreuters.com ; +1 416 941-8094; Reuters
Messaging: frank.pingue.reuters.com@reuters.net))
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FOR CANADIAN MARKETS NEWS, CLICK ON CODES IN BRACKETS:
Canadian dollar and bonds report....[CAD/][CA/]
TSX market report..........[.TO]
Headlines from global forex markets ...[FXNEWS]
Bank of Canada stories.....[BOC]
Bank of Canada weekly t-bill auction...[CA/BIL]
Bank of Canada securities auctions.....[CA/AUC]
Bank of Canada interest rate story.....[CA/INT]
Reuters monthly Canadian dollar poll..FOREXPOLL33 [CAD/POLL]
Canadian interest rate poll...........[CA/POLL]
Reuters G7 quarterly economy poll....[ECILT/CA]
Weekly economic data poll......[ECI/CA][ECI/CI]
Reuters global stocks poll (Canada)...EQUITYPOLL5 [EPOLL/CA]
Top News: Canada ......[TOP/CAN]
Today in Canada.......[CA/DIARY]
Canadian debt and money news ....[D-CAN][M-CAN]
FOR CANADIAN MARKETS DATA, CLICK ON CODES IN BRACKETS:
Real-time Canadian economic RICS.......ECONCA
Canadian dollar quote............CAD=CAD=D3
Canadian bonds quote..CDBN<0#CABMK=>CABONDT
Canadian money market quote...CDMN<0#CAMMKT=>
Canada-Treasury spread rates........<CA/SPREAD>
Canadian Debt and Forex speed guide...........<CA/DEBT><CAD/1>
Canadian Equities speed guide.......<CA/EQUITY>
S&P/TSX Composite index ...............GSPTSE
FOR MAIN GLOBAL MARKET DATA AND MARKET REPORTS:
  FTSE Eurotop 300 ......FTEU3  European report .......[.EU]
  Nikkei 225..............N225  Tokyo report............[.T]
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  Xetra DAX..............GDAXI  Frankfurt market stories[.F]
  CAC-40...FCHI  Paris market stories...[.PA]
  World Indices.......<0#.INDEX>
  Foreign exchange........[FRX/]
  Oil.......[O/R]
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