2 Min Read
* C$ down at C$0.9875 vs US$, or $1.0127 * Bond prices extend gains across curve By Claire Sibonney TORONTO, Jan 16 (Reuters) - The Canadian dollar drifted lower against the U.S. dollar on Wednesday as poor global economic data kindled fears about the health of the world economy. A slow economic recovery in developed nations is holding back the global economy, the World Bank said, as it sharply cut its outlook for world growth in 2013. Meanwhile, the economic outlook for the euro zone darkened as data showed new-car sales in December had plunged to their the lowest since 1995, with top producers like Volkswagen suffering heavy falls. The news comes a day after Germany said its economy shrank at its fastest pace in almost three years in the final quarter of 2012. "The Canadian dollar is weaker on general market sentiment, which is shedding risk," said John Curran, senior vice president at CanadianForex. At 9:14 a.m. (1414 GMT), the Canadian dollar was at C$0.9875 versus the greenback, or $1.0127, softer than Tuesday's North American session close at C$0.9841, or $1.0162. Still, Curran noted that the currency was still largely rangebound on Wednesday, as it has been over the past couple months, along with other commodity currencies. "People are comfortable with their levels against the U.S. dollar for those currencies," he said. "There's still a bit of a premium attached to all of them." Curran noted near-term Canadian dollar support around C$0.9880. Breaching that level would open up further weakness toward C$0.9920. Canadian bond prices picked up across the curve, following U.S. Treasuries up as traders extended the previous day's gains on mounting concerns about a looming political battle in Washington to raise the government's debt limit. Canada's two-year bond rose 3 Canadian cents to yield 1.170 percent, while the benchmark 10-year bond added 19 Canadian cents to yield 1.887 percent.