CANADA FX DEBT-C$ weakens after Keystone; U.S. Fed minutes in focus

Wed Nov 19, 2014 9:14am EST
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* Canadian dollar at C$1.1345, or 88.14 U.S. cents
    * Bond prices fall across the maturity curve

    By Solarina Ho
    TORONTO, Nov 19 (Reuters) - The Canadian dollar weakened
against the U.S. dollar on Wednesday, driven by overnight flows
out of Asia and after the U.S. Senate voted down a bill that
would force the approval of the Keystone XL oil pipeline.
    The U.S. dollar touched a seven-year high against the yen
ahead of the Federal Reserve's October meeting minutes, due
later on Wednesday, which may shed more light on the divergence
in monetary policy between the U.S. central bank and its major
global peers.
    The bill for the TransCanada Corp pipeline fell just short
of the 60 votes needed for passage, and new legislation is
likely to be introduced next year. The pipeline, if approved,
would transport more than 800,000 barrels per day of oil from
the Alberta oil sands to the U.S. Gulf Coast.
    Mazen Issa, senior Canada macro strategist at TD Securities,
said the Asian market pushed the U.S. dollar higher against the
Canadian currency overnight.
    "But there wasn't much in terms of a trigger point," Issa
said. "Right now, it's still a wait-and-see mode. 
    "Keystone may have a role to play in the overnight session,
but that's just one aspect."
    At 8:52 a.m. (1352 GMT), the Canadian dollar was
trading at C$1.1345 to the greenback, or 88.14 U.S. cents,
weaker than Tuesday's close of C$1.1299, or 88.50 U.S. cents.
    Canadian government bond prices were lower across the
maturity curve, with the two-year down 2 Canadian
cents to yield 1.013 percent and the benchmark 10-year
 shedding 26.5 Canadian cents to yield 2.027 percent.

 (Reporting by Solarina Ho; Editing by Lisa Von Ahn)