CANADA FX DEBT-C$ firm ahead of U.S., Canada GDP data

Fri Jul 30, 2010 8:08am EDT
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 * C$ rises to 96.95 U.S. cents
 * Bond prices higher across the curve
 By Claire Sibonney
 TORONTO, July 30 (Reuters) - The Canadian dollar gained
against its U.S. counterpart on Friday morning as U.S. stock
index futures fell and the greenback weakened on worries U.S.
growth may show the world's biggest economy is losing steam.
  The second quarter GDP data, due at 8:30 a.m. (1230 GMT),
is expected to show that a capital investment drive by
businesses was sated by imports and consumer spending tapered
off. [ID:nN29111411]
 Canada's gross domestic product figures are also in focus
for the Canadian currency, and are expected to show a 0.1
advance in May from April.
 "Obviously the market has been back and forth buying
dollars on risk-off and selling dollars on risk-on but I do
think that things are starting to get to the point where we're
going to make a little more sense of things," said Steve
Butler, director of foreign exchange trading at Scotia
 "At some point I think weaker equity markets won't
necessarily be good for the dollar in terms of risk-off ... I
think that there are starting to be more and more concerns
about the health of the U.S., the debt and deficit levels and
obviously we got a warning about sovereign ratings in the
  On Thursday Moody's Investors Services told Dow Jones
newswire that the U.S. government needs to elaborate a credible
plan to address its soaring debt in order to maintain its Aaa
credit rating. [ID:nN29190063]
 At 7:54 a.m. (1154 GMT), the Canadian currency CAD=D4 was
at C$1.0315 to the U.S. dollar or 96.95 U.S. cents, up from
C$1.0362 to the U.S. dollar, or 96.51 U.S. cents, after falling
for the previous two days.
 With riskier assets in decline ahead of the GDP data,
Canadian bond prices tracked U.S. Treasuries higher.
 The Canadian two-year bond CA2YT=RR was up 7 Canadian
cent to yield 1.496 percent, while the 10-year bond CA10YT=RR
added 5 Canadian cents to yield 3.154 percent.
 (Reporting by Claire Sibonney; Editing by Theodore d'Afflisio)