CANADA FX DEBT-C$ ends weaker but euro zone hope limits loss

Wed Sep 14, 2011 4:36pm EDT
 
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 * C$ ends at C$0.9908 vs US$ or $1.0093
 * Equities, euro rally on Europe optimism
 * Bond prices mostly lower
 By Andrea Hopkins
 TORONTO, Sept 14 (Reuters) - The Canadian dollar ended
lower against the U.S. dollar on Wednesday but its losses were
limited as some positive news on resolving the euro zone's debt
crisis perked up risk appetite.
 Global equities rallied and the euro rose as optimism over
tentative steps to resolve Europe's debt crisis overcame still
widespread fears that Greece will ultimately default on its
debt. [MKTS/GLOB]
 Stocks on Wall Street ended the day more than 1 percent
higher after Europe's top bureaucrat said plans for a euro zone
bond, seen by many as a key tool to ease the region's festering
debt crisis, would soon be presented. [ID:nL3E7KE09F]
 While the Canadian dollar typically follows U.S. equities,
the currency ended the day slightly weaker although analysts
said there could be more upside in the next few sessions.
 "It's actually almost unchanged on the day, which is a
little disappointing due to the fact we've seen a really strong
rally in equities today after a bump in risk sentiment," said
Steve Butler, director of foreign exchange trading at Scotia
Capital.
 "I wouldn't be surprised to see us maybe take out
yesterday's lows at some point and maybe push back through that
C$0.98 level. It just feels like equities are stabilizing and
there is potential we might see a little bit of a bounce over
the next couple days."
 The Canadian dollar CAD=D4 ended the North American
session at C$0.9908 to the U.S. dollar, or $1.0093 U.S. cents,
down from Tuesday's North American session close of C$0.9854 to
the U.S. dollar, or C$1.0148.
 While U.S. retail sales data rose less than expected, the
focus remained on Europe, where the European Commission said it
would soon present options for the introduction of euro area
bonds, a development investors saw as a significant step
despite German opposition to the idea. [ID:nL3E7KE1P9]
 "The developments out of Europe continue to be the most
meaningful influence in currency valuations," said Jack Spitz,
managing director of foreign exchange sales at National Bank
Financial.
 Canadian bond prices were mostly lower across the curve.
 The two-year bond CA2YT=RR was up 1 Canadian cent to
yield 0.938 percent, while the 10-year bond CA10YT=RR shed 4
 Canadian cents to yield 2.204 percent.
 (Additional reporting by Claire Sibonney; editing by Peter
Galloway)