CANADA FX DEBT-C$ hits 1-wk high as greenback resumes selloff

Mon Oct 25, 2010 9:36am EDT
 
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 * C$ rises to 98.24 U.S. cents
 * Bond prices firm across the curve
 * With G20 over, market focuses on coming FOMC meeting
 TORONTO, Oct 25 (Reuters) - The Canadian dollar hit a
one-week high against the greenback on Monday as a weekend
meeting of Group of 20 leaders yielded few concrete policy
measures on economic issues.
 G20 finance ministers pledged on Saturday to move towards
market-determined exchange rates and commit to a full range of
policies to reduce excessive external imbalances. But no major
policy initiatives emerged and the United States failed in an
attempt to shrink China's surplus, which sent the U.S. currency
broadly lower. [ID:nTOE69M004] [FRX/]
 "We were left with a lot of comforting words as opposed to
specific details. The market can move beyond that and focus in
on next week's FOMC meeting as well as the election in the
U.S.," said David Tulk, senior macro strategist at TD
Securities.
 "We're back to this pro-(quantitative easing) trade today
where everything is stronger but the U.S. dollar."
 At 9:15 a.m. (1315 GMT), the Canadian dollar CAD=D4 was
at C$1.0179 to the U.S. dollar, or 98.24 U.S. cents, up from
C$1.0269 to the U.S. dollar, or 97.38 U.S. cents, at Friday's
close.
 Canada's data calendar is empty until Friday when
Statistics Canada releases August figures for GDP as well as
producer price data for September.
 But market participants expected trading would be fairly
light all week ahead of the Nov. 2-3 meeting of the U.S.
Federal Open Market Committee.
 "People in the market have been looking forward to this
FOMC meeting for a good number of months now. Waiting is the
hardest part," said Tulk.
 "It would take a lot to actually divert the market's
attention in the intermediate days between now and the FOMC."
 The policy-setting arm of the U.S. central bank is widely
expected to announce another round of asset purchasing to help
the anemic U.S. economy.
 Canadian government bonds prices were higher, continuing on
recent trend as markets anticipated further stimulus from the
Fed.
 The two-year bond CA2YT=RR rose 3 Canadian cents to yield
1.379 percent, while the 10-year bond CA10YT=RR was up 30
Canadian cents to yield 2.707 percent.
 (Reporting by Ka Yan Ng, Editing by Chizu Nomiyama)