CANADA FX DEBT-C$ ends at par with greenback, bonds ease

Thu Dec 30, 2010 4:34pm EST
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   * Canadian dollar ends at par for first time since Nov. 10
 * Bond prices slip on upbeat U.S. economic data
 (Updates to close)
 By Ka Yan Ng
 TORONTO, Dec 30 (Reuters) - Canada's dollar closed exactly
at par with the U.S. dollar for the first time in seven weeks
on Thursday in quiet trade, supported by an upbeat long-term
outlook for the U.S. economy.
 Despite a retreating price of crude oil to below $90 a
barrel, the commodity-influenced Canadian dollar stayed close
to parity with the greenback on Thursday, as it has all week.
 It was the first time since Nov. 10 that the Canadian
dollar closed at par, up slightly from C$1.0006 to the U.S.
dollar, or 99.94 U.S. cents, at Wednesday's close.
 The Canadian dollar has reached a one-for-one footing with
the U.S. currency several times this year but has not
maintained that level for long.
 TD Securities said the currency's movements this week were
reminiscent of the beginning of November, when it spent about a
week testing parity before retreating toward C$1.03 to the U.S.
 Slim trading volumes ahead of the New Year's holiday may
put the Canadian dollar in choppy conditions but, overall,
analysts expect the currency will hover around parity into
 "We may tomorrow see some end-of-year portfolio balancing
which might provide some volatility. But, overall, traders are
still expecting to see minor movement for the remainder of
2010," said Darren Richardson, corporate dealer at
 Thursday's North American trading range was a scant 28
ticks, between C$0.9995 and C$1.0023 to the U.S. dollar.
 Mounting confidence about the U.S. economy should help
support the currency because Canada's export-oriented economy
is closely tied to the health of the United States.
 Upbeat data on the U.S. jobs market and manufacturing
sector on Thursday helped support the view that the U.S.
economy gained momentum as the year ended, setting the stage
for a stronger performance in 2011. [ID:nN3097646]
 The data helped push Canadian government bond prices lower,
with the two-year bond CA2YT=RR down 3 Canadian cents to
yield 1.709 percent. The 10-year bond CA10YT=RR was off 4
Canadian cents to yield 3.166 percent. Canadian government debt
put in a mixed performance against U.S. Treasuries.
 (Reporting by Ka Yan Ng; editing by Rob Wilson)