August 25, 2017 / 8:32 PM / 3 years ago

CANADA FX DEBT-C$ edges to 3-1/2-week high, but underperforms rivals

 (Adds analyst comment, updated prices, Yellen and Draghi speech
    * Canadian dollar at C$1.2481, or 80.12 U.S. cents
    * Bond prices mostly higher across maturity curve

    By Solarina Ho
    TORONTO, Aug 25 (Reuters) - The Canadian dollar inched
higher against a broadly weaker U.S. dollar on Friday, but
underperformed against other rivals as a dearth of domestic news
had investors focusing on speeches by Federal Reserve Chair
Janet Yellen and European Central Bank head Mario Draghi.
    The euro jumped to more than two-year highs against the U.S.
dollar after Draghi did not express concern about a strong euro
zone currency in a speech at the annual central banker meeting
in Jackson Hole, Wyoming. 
    The greenback fell to a three-week low against the euro
earlier in the session after Yellen's speech made no reference
to monetary policy.
    At 4 p.m. EDT (2000 GMT), the Canadian dollar          was
trading at C$1.2481 to the greenback, or 80.12 U.S. cents, up
0.3 percent from the previous session's close.
    The currency traded between C$1.2466 and C$1.254, touching
its strongest level in 3-1/2 weeks.
    "The CAD's performance was ninth out of 10 in the G10
currencies, so this should not be thought of as some big
appreciation," said Greg Anderson, global head of foreign
exchange strategy at BMO Capital Markets in New York.
    With no Canadian economic data or other event to steer
direction in thin trading until the quarterly Canadian GDP
figures due next Friday, traders will likely continue to take
direction from external factors.
    Anderson said BMO's currency model suggested the Canadian
dollar should have strengthened more than it did, opening the
door for further gains on Monday.
    He noted the latest data showed that long-CAD positions were
10 percent smaller than they were the previous week, and that
investor positioning was only a minor impediment to the
currency's moves.
    Prices of oil, a major Canadian export, rose modestly on
Friday as the U.S. Gulf Coast braced for Hurricane Harvey, which
could become the biggest storm to hit the U.S. mainland in more
than a decade.     
    Canadian government bond prices were mostly higher across
the maturity curve. The two-year            price was flat to
yield 1.267 percent and the benchmark 10-year             rose
13 Canadian cents to yield 1.873 percent.
    The Canada-U.S. two-year bond spread was -7.1 basis points,
while the 10-year spread was -29.8 basis points.

 (Reporting by Solarina Ho; Editing by Meredith Mazzilli)
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