CANADA FX DEBT-C$ falls on global economic worries

Wed Nov 26, 2008 10:19am EST
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 * Canadian dollar falls 0.9 percent versus greenback
 * Bond prices rally with U.S. market on soft U.S. data
 By John McCrank
 TORONTO, Nov 26 (Reuters) - The Canadian dollar fell nearly
1 percent against the U.S. dollar on Wednesday as softness in
equity markets intensified fears of a global recession, causing
investors to jettison the commodity-linked currency.
 Canadian bond prices rallied along with the larger U.S.
market after some weaker-than-expected U.S. data, which
increased the allure of safe-haven government debt.
 At 9:48 a.m. (1448 GMT), the Canadian dollar was at
C$1.2360 to the U.S. dollar, or 80.91 U.S. cents, down from
C$1.2250 to the U.S. dollar, or 81.63 U.S. cents, at Tuesday's
 In the overseas session, the currency rose to C$1.2162 to
the greenback, or 82.22 U.S. cents, before tumbling to C$1.2415
to the U.S. dollar, or 80.54 U.S. cents.
 "The selloff in the Canadian dollar this morning...
coincided with the selloff in the U.S. equity futures," said
Matthew Strauss, senior currency strategist at RBC Capital
 U.S. stock futures fell on gloomy outlooks from several
companies, ramping up anxiety about the global economic
 The Canadian dollar was lower against most major
currencies, as the economic climate pointed to lower demand for
the commodities that Canada exports.
 Strauss said C$1.2480 is a key resistance point for the
Canadian dollar, and that if it weakens past that point, it
will likely continue trending lower.
 Bond prices rallied along with the larger U.S. market on
some weaker than expected U.S. economic data, which sent
investors looking for safe-haven government debt.
 The data showed that orders for durable goods such as cars,
machinery, and computers fell 6.2 percent in October, more than
double what analysts were expecting.
 "Those durable goods orders are absolutely atrocious and
they signal again that the business sector is getting dragged
into this thing as well," said Eric Lascelles, chief economics
and rates strategist at TD Securities.
 Other U.S. data showed higher jobless claims and weaker
consumer spending.
 There were no major Canadian data releases.
 The Canadian overnight Libor rate LIBOR01 was 2.2500
percent, down from 2.2583 percent on Tuesday.
 Tuesday's CORRA rate CORRA= was 2.2390 percent, down from
2.2472 percent on Monday. The Bank of Canada publishes the
previous day's rate at around 9 a.m. daily.
 The two-year bond rose 3 Canadian cents to C$101.96 to
yield 1.758 percent. The 10-year bond climbed 20 Canadian cents
at C$107.10 to yield 3.370 percent.
 The yield spread between the two-year and 10-year bond was
173 basis points, up from 171 at the previous close.
 The 30-year bond jumped 50 Canadian cents to C$117.90 to
yield 3.948 percent. In the United States, the 30-year Treasury
yielded 3.557 percent.
 (Editing by Peter Galloway)