CANADA FX DEBT-C$ sheds more than a cent as commodities plunge

Mon Apr 15, 2013 4:37pm EDT
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* C$ at C$1.0254 vs US$, or 97.52 U.S. cents
    * Gold sinks more than 8 pct; worst two-day loss in 30 yrs
    * China growth below economists' expectations
    * Bond prices rise across curve

    By Solarina Ho
    TORONTO, April 15 (Reuters) - The Canadian dollar tumbled on
Monday to its weakest level against the U.S. currency in three
weeks, as commodity prices plunged on weaker-than-expected
Chinese data.
    Gold, silver, copper and oil prices were all slammed after
data showed China's recovery unexpectedly stumbled in the first
three months of 2013, with an annual growth rate of 7.7 percent
versus economists' expectations of 8 percent growth.
    "Canada has been part of the sell-off. There's been a bit of
flight into U.S. dollars," said Don Mikolich, executive
director, foreign exchange sales at CIBC world markets. "Anytime
commodities are getting hit, that's never good for Canada."
    Gold prices in particular, sank more than 8 percent to below
$1,400 per ounce, posting the worst two-day loss in 30 years.
    "Obviously the key theme was the soft Chinese data and the
impact it had on commodities and commodity currencies," said
Matt Perrier, a director of foreign exchange sales at BMO
Capital Markets.
    The Canadian dollar finished the North American session at
C$1.0254 against the U.S. dollar, or 97.52 U.S. cents on Monday,
more than a cent off Friday's finish at C$1.0138, or 98.64 U.S.
cents. This was the currency's weakest performance since March
    "A lot of our accounts are seeing the move up to C$1.02 as
an opportunity," said Mikolich. "The buyers are obviously on
hold now until we can move back to the mid-1.01's."
    Market-moving data from both sides of the border, including
U.S. and Canadian consumer price index data, will be in focus
this week. The Bank of Canada's next interest-rate decision and
monetary policy report will come on Wednesday. 
    The price of Canadian government debt was higher across the
curve, with the two-year bond climbing 3.2 Canadian
cents to yield 0.937 percent and the benchmark 10-year bond
 rising 17 Canadian cents to yield 1.718 percent.