CANADA FX DEBT-Loonie bounces back in quiet session

Tue Nov 11, 2014 4:23pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* Canadian dollar at C$1.1.1331 or 88.25 U.S. cents
    * Bond market closed for Remembrance Day

 (Adds details, quotes; updates prices)
    By Leah Schnurr
    OTTAWA, Nov 11 (Reuters) - The Canadian dollar firmed
against its U.S. counterpart on Tuesday, bouncing back from the
previous day's drop as it benefited from stronger U.S. crude
prices and a weaker greenback.
    Trading during the session was muted, with the Canadian bond
market closed for Remembrance Day and the bond market south of
the border closed for Veterans Day.
    The Canadian dollar hit a more than five-year low last week
but has managed to recoup some losses since. The currency has
lost more than 6 percent since early July as it was hit by a
broad rally in the U.S. dollar and, more recently, a slump in
oil prices.
    Although Brent crude fell again on Tuesday to hit a
four-year low, U.S. crude managed to push higher,
settling up 54 cents at $77.94 a barrel. 
    The loonie could continue to get a reprieve in the short
term, but it is likely to resume its downward path in the coming
months, analysts said.
    "Beyond today, the next week or two we may see a bit of a
drift lower or at least a sideways move" in the U.S.
dollar-Canadian dollar pairing, said Shaun Osborne, chief
currency strategist at TD Securities in Toronto. 
    "The price action we saw late last week does suggest that
we've probably run a little bit high on the topside now. We're
probably due for a small correction, at least."
    The Canadian dollar was at C$1.1331 to the
greenback, or 88.25 U.S. cents, stronger than Monday's close of
C$1.1374, or 87.92 U.S. cents.
    The currency is likely to be comfortable trading in the
C$1.13s for now, said Scott Smith, senior market analyst at
Cambridge Mercantile Group in Calgary.
    "The longer-term fundamental picture is one of a higher U.S.
dollar, especially when you look at the divergence between
monetary policy between the Federal Reserve and Bank of Canada,"
which will weigh on the loonie, Smith said.

 (Editing by Lisa Von Ahn)