CANADA FX DEBT-C$ weakens as US consumer confidence weighs

Tue Jul 28, 2009 1:23pm EDT
 
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 * C$ retreats from C$1.0750 to the U.S. dollar
 * Pressured by equity, commodity weakness
 * Bond prices climb on safe haven bid
 (Adds details, quote)
 TORONTO, July 28 (Reuters) - Canada's dollar pulled back
from a near 10-month high against the U.S. dollar at midday on
Tuesday, dragged down by lower oil prices and retreating
equites after a disappointing reading of U.S. consumer
confidence.
 The currency fell back after racing as high as C$1.0750 to
the U.S. dollar, or 93.02 U.S. cents, earlier in the day, its
highest level since Oct. 3.
 The currency fell with North American stock markets after a
report showed U.S. consumer confidence declined more than
anticipated in July, while some quarterly corporate results and
forecasts sparked worries about the strength of the
recovery.[ID:nN28130084] [ID:nN28129823]
 "We started to see the markets fade off again once we
touched that new high," said Camilla Sutton, currency
strategist at Scotia Capital.
 "With the release of consumer confidence we really saw some
weakness out of equities."
 At 12:51 p.m. (1651 GMT), the Canadian currency was at
C$1.0885 to the U.S. dollar, or 91.87 U.S. cents, down from
C$1.0811 to the U.S. dollar, or 92.50 U.S. cents, at Monday's
close.
 Weak oil prices also helped to tug the currency lower,
while gold and base metals prices were also weak.
 The Canadian dollar is up about 20 percent since falling to
a four-year low in March.
 "Over the last two weeks, we've seen a tremendous move in
the Canadian dollar higher so I think a part of it is just a
natural give back," Sutton said.
 BONDS HIGHER
 Canadian bond prices, with no domestic economic data to
consider until later in the week, followed the bigger U.S.
Treasury market higher across the curve as money flowed out of
assets perceived to be risky. [ID:nN28419221]
 "It's all very much connected today," Sutton said.
 The two-year Canada bond was up 7 Canadian cents at
C$99.88 to yield 1.316 percent, while the 10-year bond rose 51
Canadian cents to C$101.91 to yield 3.518 percent.
 The 30-year bond climbed 95 Canadian cents to C$116.25 to
yield 4.024 percent. In the United States, the 30-year Treasury
yielded 4.5222 percent.
 (Reporting by Jennifer Kwan; editing by Peter Galloway)