CANADA FX DEBT-C$ creeps up as stocks, commodities advance

Thu Jul 29, 2010 8:21am EDT
 
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 * C$ rises to 96.82 U.S. cents
 * Bonds prices mostly flat
 By Claire Sibonney
 TORONTO, July 29 (Reuters) - The Canadian currency edged
higher against the greenback on Thursday, boosted by rising
North American equity futures, firm commodity prices and
broader U.S. dollar weakness.
 The U.S. dollar hit a three-month low a day after weak
durable goods data and a downbeat assessment of the economy
from the Federal Reserve.
 Currency players also took their cue from a report that a
Moody's official said the U.S. government needs to provide a
credible plan to address its rising debt profile in order to
maintain its top-notch credit rating.
 "The news that most people are talking about this morning
is that Moody's has made some comments in London hours about
how the U.S. government needs to articulate a credible fiscal
plan and how the debt projections are realizing the rating
review might have to come into play," said Firas Askari, head
of foreign exchange trading at BMO Capital Markets.
 "It's a bit of small shot across the bow about the U.S.'s
triple-A rating, so the U.S. dollar has been sold across the
board on that."
 The Moody's official was interviewed by Dow Jones
Newswires.
  U.S. stock index futures were poised to rally following
two days of declines for the S&P 500 after upbeat European
economic data and ahead of an expected drop in U.S. jobless
claims. [.N]
 As well, oil was steady at around $77 after falling the
previous day on the soft U.S. data and the biggest weekly
increase in crude inventories for nearly two years in the
United States. That could also affect the commodity-linked
Canadian currency. [O/R]
 At 8:13 a.m. (1213 GMT), the Canadian currency CAD=D4 was
at C$1.0328 to the U.S. dollar, or 96.82 U.S. cents, up from
Wednesday's finish at C$1.0385 to the U.S. dollar, or 96.29
U.S. cents.
 "We're still in this range, we couldn't break through
C$1.0260 and anywhere above C$1.0420 seems to be an area to
sell U.S. and buy a little Canada short term," said Askari.
 "But I'm having a hard time seeing how we're going to break
out of this C$1.0150 to C$1.0850 range in the next few months,
the same range we've been in for months."
 On the domestic data calendar were industrial product and
raw material price indexes.
 Canadian bond prices were mostly flat, following the last
sesssion's gains.
 The Canadian two-year bond CA2YT=RR was up 1 Canadian
cent to yield 1.591 percent, while the 10-year bond CA10YT=RR
gained 10 Canadian cents to yield 3.230 percent.
(Reporting by Claire Sibonney; Editing by Frank McGurty)