CANADA FX-C$ stumbles as Bernanke comments drive broad US$ strength

Wed Jun 19, 2013 5:10pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* C$ at C$1.0273 vs US$, or 97.34 U.S. cents

* Fed expected to slow bond purchases, halt mid-2014

* Poloz maintains Bank of Canada policy

* Bond prices fall sharply across maturity curve

By Solarina Ho

TORONTO, June 19 (Reuters) - The Canadian dollar fell sharply against a broadly stronger U.S. dollar on Wednesday and bond prices slumped after the Federal Reserve expressed optimism about the U.S. economy and labor market.

Fed chief Ben Bernanke also said the Fed is expected to slow the pace of bond purchases later this year and bring them to a halt around mid-2014. The comments weighed on stocks and pushed bond yields to a 15-month high.

"Clearly Bernanke was the dominant force ... the Fed's become incrementally more optimistic about the outlook in terms of just shading down some of the downside risk," said David Tulk, chief Canada macro strategist at TD Securities.

"The taper talk really was in play, and we see that follow through. It's very positive for the U.S. dollar and by association, CAD just gets caught in the crossfire like every other currency today ... It's more a broad-brush U.S. dollar strength story."   Continued...