CANADA FX DEBT-C$ nudges higher as data, Fed in focus

Mon Aug 19, 2013 10:02am EDT
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* C$ at C$1.0333 vs US$, or 96.78 U.S. cents
    * Fed minutes, Canadian retail sales, CPI in focus this week
    * Bond prices mixed, lower across long-term end of curve

    By Solarina Ho
    TORONTO, Aug 19 (Reuters) - The Canadian dollar eked out a
slight gain against its U.S. counterpart on Monday, and was
primarily awaiting Canadian retail sales and inflation data this
week for further cues.
    The Canadian dollar, which is coming off an especially quiet
week, has been mostly pushed and pulled by U.S. data and Federal
Reserve commentary recently. Minutes of the Fed's most recent
policy meeting due out this week are expected to provide better
clarity on when the central bank will begin to scale back its
stimulus program.  
    Domestically, analysts are expecting Canadian retail sales
to fall 0.4 percent and inflation to grow by 0.2 percent. Retail
sales is due on Thursday and inflation is due on Friday.
    "I think it's really a case of the markets waiting ... on
the Canadian data, in particular, retail sales and CPI," said
Shaun Osborne, chief currency strategist at TD Securities.
    "And it's a case of waiting for the Fed moves to see if
there's any sharpening of the Fed's tapering rhetoric."
    At 9:34 a.m. (1334 GMT), the Canadian dollar was
trading at C$1.0333 versus the greenback, or 96.78 U.S. cents, 
marginally stronger than Friday's session finish at C$1.0339, or
96.72 U.S. cents.
    The Canadian dollar was outperforming the Japanese yen
 and Australian dollar, but underperforming
the British pound and the euro.
    The currency was not expected to break out of Monday's
narrow trading range so far of C$1.0316 and C$1.0341 during the
session, said Osborne, adding that in the near term, the
currency was expected to trade between C$1.0250 and C$1.04 over
the next few days.
    Prices for Canadian government debt were lower across longer
end of the maturity curve. The two-year bond slipped
half a Canadian cent to yield 1.221 percent and the benchmark
10-year bond fell 15 Canadian cents to yield 2.733
percent, its highest yield in more than two years.