CANADA FX DEBT-C$ strengthens as greenback takes a breather

Tue Jul 21, 2015 4:35pm EDT
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* Canadian dollar at C$1.2948 or 77.23 U.S. cents

* Bond prices mostly higher across the maturity curve (Updates to close, adds analyst comment)

By Andrea Hopkins

TORONTO, July 21 (Reuters) - The Canadian dollar firmed against its U.S. counterpart on Tuesday as U.S. dollar buyers took a breather and gold and oil prices stabilized, but an analyst said the outlook remained grim for Canada's commodity-linked currency.

"The U.S. dollar has been extremely strong for the last month and it really came off today. The Canadian dollar also benefited from gains in oil, so we saw a sharp snapback in the Canadian dollar, but we're skeptical it will last," said Adam Button, currency analyst at ForexLive in Montreal.

Crude oil and gold prices edged higher on Tuesday on the back of a softer U.S. dollar, while weak earnings dragged stocks lower.

Spot gold prices gave up most of the day's gains and were up marginally after hitting a five-year low on Monday. Investors have dumped gold as the dollar rises and Greece looks to seal a bailout deal.

U.S. crude oil futures rose in choppy trading as the August contract expired, while Brent advanced but remained toward the bottom of its $55-$60 a barrel range of the past weeks, near its lowest since early April.

"The markets have been extremely bearish on the Canadian dollar and today it was not so much the Canadian dollar bouncing as the U.S. dollar buyer taking their foot off the pedal for a breather," said Button.   Continued...