CANADA FX DEBT-C$ edges lower as risk appetite fades

Mon Nov 29, 2010 8:27am EST
 
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 * C$ dips to 97.97 U.S. cents
 * Bonds little changed
 TORONTO, Nov 29 (Reuters) - The Canadian dollar was
slightly lower against the U.S. dollar on Monday morning as a
rescue package for Irelend agreed to on the weekend failed to
lift risk appetite for very long.
 European Union finance ministers endorsed an 85
billion-euro loan package on Sunday to help Dublin cover bad
bank debts and bridge a huge budget deficit. [ID:nTOPNOW6]
 The news spurred some willingness for risk, helping to push
the Canadian dollar as high as C$1.0147 to the U.S. dollar, or
98.55 U.S. cents.
 But it was about flat by the time the North American
session got underway, as European stocks were lower in choppy
trading and North American stock index futures indicated a fall
to start the new trading week as euro zone worries persisted.
 "Sentiment started deteriorating in the European session
with the market once again focusing on the countries that might
still need financial assistance going forward," said Matthew
Strauss, senior currency strategist at RBC Capital Markets.
 At 8:10 a.m. (1310 GMT), the Canadian dollar CAD=D4 was
at C$1.0207 to the U.S. dollar, or 97.97 U.S. cents, down from
C$1.0200 to the U.S. dollar, or 98.04 U.S. cents, at Friday's
close.
 Strauss said the Canadian dollar may have a quiet session
but remain under pressure ahead of this week's heavy slate of
key data, which includes growth data for September and the
third quarter, as well as November employment data.  ECONCA
[ID:nN26127869] [ID:nN26125524]
 The data will be used to help determine the Bank of Canada
monetary policy path, although it is unlikely to sway opinion
about the central bank's Dec. 7 rate announcement.
 Markets are pricing in roughly a 94 percent chance of no
change in benchmark rates then, according to a Reuters
calculation of yields on overnight index swaps, which reflect
expectations for the policy rate. BOCWATCH 
 The Bank of Canada recently said it would have to consider
any further rate hikes carefully given the patchy global
recovery and expected curbs on Canadian growth. For more
details, please see: [ID:nN27276109] [CA/POLL]
 Canadian government bonds were little changed across the
curve on Monday, a muted reaction following the Irish bailout
news.
 The two-year government of Canada bond CA2YT=RR dipped 1
Canadian cent to yield 1.673 percent, while the 10-year bond
CA10YT=RR fell 13 Canadian cents to yield 3.130 percent.
 (Reporting by Ka Yan Ng,Editing by Chizu Nomiyama )