CANADA FX DEBT-C$ down but makes move off three-week low

Tue Oct 27, 2009 7:50am EDT
 
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 * C$ down at C$1.0687 per U.S. dollar
 * Oil and gold price offer support
 * Bond prices rebound across curve
 By Frank Pingue
 TORONTO, Oct 27 (Reuters) - Canada's dollar was slightly
weaker versus the U.S. currency early on Tuesday, sitting near
the three-week low reached in the overnight session, as the
impact from Bank of Canada comments lingered.
 In Monday's session, Bank of Canada Governor Mark Carney
added to an already cautious tone when he reiterated a warning
he gave last week that the Canadian currency's rally toward par
with the greenback was a risk to growth.  [ID:nBAC002343]
 The comments were followed by remarks from Canadian Finance
Minister Jim Flaherty, who said one way to cut the value of the
currency was for the central bank to engage in quantitative
easing. [ID:nN26125511]
 The Canadian dollar fell as low as C$1.0718 to the U.S.
dollar, or 93.30 U.S. cents, overnight, which marked the second
straight day it touched a three-week low. But the slide was
contained somewhat by a weaker U.S. dollar.
 "We've got the U.S. dollar which yesterday looked like it
was all set to throw off the shackles of the bears, but instead
it got weighed down again overnight," said David Watt, senior
currency strategist RBC Capital Markets. "But there just didn't
seem to be much reason to buy the Canadian dollar overall."
 At 7:40 a.m. (1140 GMT), the Canadian unit was at C$1.0687
to the U.S. dollar, or 93.57 U.S. cents, down from C$1.0670 to
the U.S. dollar, or 93.72 U.S. cents, at Monday's close.
 The commodity backdrop was somewhat positive as gold prices
edged off a three-week low while oil prices moved above $79 a
barrel after three sessions of decline. [GOL/] [O/R] Commodity
prices often influence the Canadian dollar given the nature of
Canada's exports.
 Domestic bond prices, which all retreated in the previous
session, were higher across the curve alongside the bigger U.S.
Treasury market as investors went bargain hunting.
 (Editing by Theodore d'Afflisio)