CANADA FX DEBT-C$ weakens further on euro zone doubts

Wed Sep 28, 2011 4:33pm EDT
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 * C$ falls to C$1.0326 vs US$, or 96.84 U.S. cents
 * C$ following global equities lower
 * Bond prices mixed, short end prices firm
 (Updates to close)
 By Andrea Hopkins
 TORONTO, Sept 28 (Reuters) - The Canadian dollar ended more
than 1 cent weaker against its U.S. counterpart on Wednesday as
riskier assets dropped on doubts over Europe's ability to stem
a debt crisis that threatens to trigger a global recession.
 Canadian and U.S. stock markets fell 2 percent as sharp
declines in metals and energy prices weighed on
commodity-related shares and underscored concerns about the
global economy and Europe's festering debt crisis. [.TO] [.N]
 The European Union confirmed negotiators would return to
Greece this week to discuss issuing its next tranche of aid,
the latest in a series of developments that have not changed
the overall picture of uncertainty in the euro zone.
 "We're just following equities, really," said Shane
Enright, executive director of foreign exchange sales at CIBC
World Markets.
 "We have the German vote on the EFSF tonight and there is
also likely to be comments from the troika that's in Greece
looking at the financing package. So I think we're going to
continue to trade off the back of European headlines between
now and when North American markets open tomorrow morning, and
probably through tomorrow morning as well."
 European Union and IMF inspectors will return to Athens on
Thursday to decide whether the Greek government has done enough
to secure help from its neighbors and avoid a default. Germany
suggested a new bailout may have to be renegotiated. For
details see [ID:nL5E7KS0AC].
 The Canadian dollar CAD=D4 ended the North American
session at C$1.0326 to the U.S. dollar, or 96.84 U.S. cents,
down from Tuesday's North American session close at C$1.0204 to
the U.S. dollar, or 98 U.S. cents.
 Blake Jespersen, director of foreign exchange sales at BMO
Capital Markets, noted significant Canadian-dollar support
around C$1.03 and little in the way of resistance until the
currency gets back toward parity.
 "We continue to see very wide price action on any data and
any headline, so markets are definitely jittery and liquidity
continues to be a bit of a concern," Jespersen said.
 The U.S. dollar also rose on U.S. economic data that showed
businesses stepped up investment spending in August, prompting
some economists to raise their forecasts for U.S. economic
growth this quarter. [ID:nS1E78R088]
 Bond prices were mixed. The two-year Canadian government
bond CA2YT=RR was up 13.5 Canadian cents to yield 0.95
percent, while the 10-year bond CA10YT=RR fell 38 Canadian
cents to yield 2.237 percent.
 (Additional reporting by Claire Sibonney; Editing by Jeffrey