Canadian dollar falls against stronger greenback

Thu Apr 24, 2008 9:50am EDT
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By John McCrank

TORONTO (Reuters) - The Canadian dollar fell against the U.S. dollar on Thursday, as slowing global growth prompted investors to buy the greenback as a safe haven.

Domestic bond prices fell as a positive outlook for equities markets made bonds less attractive.

At 9:28 a.m. (1328 GMT), the Canadian dollar was at C$1.0209 to the U.S. dollar, or 97.95 U.S. cents, down from C$1.0173 to the U.S. dollar, or 98.30 U.S. cents, at Wednesday's close.

The Canadian dollar is down 1.6 percent against the greenback so far this week, pressured by a hefty 50 basis point interest rate cut by the Bank of Canada and data that cast doubt on the resiliency of domestic spending amid faltering U.S. demand for Canadian goods.

However, the Canadian dollar is outperforming most other major currencies, riding the coattails of U.S. dollar strength, said Camilla Sutton, currency strategist at Scotia Capital.

"We see the U.S. dollar performing very well this morning, having gained more than a percent against a lot of the majors," she said.

The U.S. dollar rose after some key data out of Britain and the euro-zone came in below market expectations, pointing to slowing global growth.

Sutton said the greenback was also helped by concern over inflationary pressures in the United States, and the possibility that this will prompt the U.S. Federal Reserve to slow the pace of rate cuts.   Continued...