CANADA FX DEBT-C$ slides as U.S. data lifts greenback

Thu Apr 30, 2015 4:38pm EDT
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(Updates with strategist comment, closing figures, additional
month-end details)
    * Canadian dollar at C$1.2064 or 82.89 U.S. cents
    * Bond prices mostly lower across the maturity curve

    By Solarina Ho
    TORONTO, April 30 (Reuters) - The Canadian dollar retreated
on Thursday against its U.S. counterpart, which rose on the back
of stronger-than-expected U.S. data that supported expectations
the U.S. Federal Reserve will begin raising interest rates
sometime this year.
    Despite Thursday's retreat, the loonie strengthened some 5
percent in April, bolstered by a softer U.S. dollar and crude
prices that saw its best monthly gain in six years.  
    "More likely than not, we'll see some continued U.S. dollar
weakness in the near term," said Lennon Sweeting, currency
strategist at USForex. 
    "But I would expect that, in the second half of the year, we
should see U.S. dollar strength to resume as we near closer to a
fed rate hike."
    The Canadian dollar ended the session at C$1.2064
to the greenback, or 82.89 U.S. cents, softer than the Bank of
Canada's official close on Wednesday of C$1.2023, or 83.17 U.S.
    The loonie had rebounded to levels not seen since January in
recent weeks amid a more optimistic sounding Bank of Canada and
a string of better than expected domestic data.
    Domestically, data showed the Canadian economy stalled in
February, with growth in the retail sector offset by declines
elsewhere, including manufacturing. Still, the steady gross
domestic product figure topped economists' forecasts for a 0.1
percent retreat. 
    The Canadian data was overshadowed by U.S. numbers,
including figures that showed the pace of jobless claims fell to
its lowest since 2000 last week, and consumer spending rose in
    The U.S. dollar had been in retreat following a string of
lukewarm first quarter data that indicated U.S. economic growth
was slowing.
    "I think there's still some softness in both economies," 
Sweeting said.
    However, he expected the USD/CAD to move back toward levels
seen earlier this year, around C$1.27 toward the end of 2015.
    Canadian government bond prices were mixed across the
maturity curve, but the two-year price was down half
a Canadian cent to yield 0.683 percent, as was the benchmark
10-year, which fell 7 Canadian cents to yield 1.592
    The Canada-U.S. two-year bond spread was 10.8 basis points,
while the 10-year spread was -44.7 basis points.

 (Reporting by Solarina Ho; Editing by Peter Galloway and Andre