CANADA FX DEBT-C$ ends weaker, stung by commodity price fall

Tue Nov 24, 2009 4:39pm EST
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 * C$ closes at C$1.0580 per US$
 * Fifth lower close in six sessions
 * Bond prices end higher across curve
 (Recasts to close)
 By Frank Pingue
 TORONTO, Nov 24 (Reuters) - Canada's dollar fell versus the
greenback on Tuesday, hurt by lower commodity prices, with
upbeat overseas data and signs the U.S Federal Reserve is
confident in a recovery providing some support.
 A lack of risk appetite during the overnight session had
dragged the domestic currency to as low as C$1.0645 to the U.S.
dollar, or 93.94 U.S. cents, before it began a rebound.
 Helping get the turnaround underway was a German business
sentiment survey that came in better than expected, reaching
its highest level since August 2008. [ID:nGEE5AN19N]
 The currency also received a brief boost later in the day
when minutes from the U.S. Federal Reserve's November meeting
showed officials are confident the recovery is sustainable.
 It briefly rose as high as C$1.0571 to the U.S. dollar, or
94.60 U.S. cents.
 By the end of the session the Canadian dollar was not able
to fully offset a drag from lower prices for oil and gold, two
key Canadian exports whose prices often influence the currency.
[GOL/] [O/R]
 "All in all we had fairly mixed drivers of dollar/Canada on
the day and so we are really closing the day almost where we
closed yesterday." said Camilla Sutton, currency strategist
Scotia Capital.
 The Canadian dollar closed at C$1.0580 to the U.S. dollar,
or 94.52 U.S. cents, down from C$1.0558 to the U.S. dollar, or
94.71 U.S. cents, at Monday's close. The currency has closed
lower in five of the past six sessions.
 Liquidity in financial markets is expected to dry up
heading into Thursday's U.S. Thanksgiving Day holiday. Market
players often book off on Friday for an extended weekend.
 "Tomorrow could be interesting because there could be
position squaring leading into the holiday," said Sutton. "But
then once that is completed it should be pretty quiet the last
two days of the week."
 Domestic bond prices, with no major Canadian data to
influence direction, followed the bigger U.S. Treasury market
to a higher close. U.S. Treasuries rose after a strong auction
of 5-year notes. [US/]
 Appetite for more secure assets like government debt was
also boosted by news the U.S. economy grew more slowly than
first thought in the third quarter.[ID:nN24296971]
 In issuance news, the province of Ontario will sell 1.75
billion euros of a new 10-year benchmark bond, according to
IFR, a Thomson Reuters service.
 The two-year bond CA2YT=RR ended up 13 Canadian cents at
C$100.13 to yield 1.184 percent, while the 10-year bond
CA10YT=RR rose 69 Canadian cents to C$103.77 to yield 3.285
 Canadian bonds outperformed their U.S. counterparts across
much of the curve. The Canadian 10-year bond was 2.90 basis
point below its U.S. counterpart, compared with 1.50 basis
points above on Monday.
 (Editing by Jeffrey Hodgson)
 (( ; +1 416 941-8094; Reuters