December 8, 2010 / 2:00 PM / in 10 years

RPT-CANADA FX DEBT-C$ softens as oil falls, stock futures mixed

 (Repeats to additional subscribers without changes)
 * C$ little changed at 98.84 U.S. cents
 * Canadian bonds track U.S. Treasuries
 TORONTO, Dec 8 (Reuters) - The Canadian dollar eased
slightly against the U.S. currency on Wednesday morning as
riskier assets were mixed and as market players digested
proposed tax cuts in the United States.
 At 8:07 a.m. (1307 GMT), the Canadian dollar CAD=D4 was
at C$1.0117 to the U.S. dollar, or 98.84 U.S. cents, down
slightly from Tuesday's close at C$1.0114 to the U.S. dollar,
or 98.87 U.S. cents.
 "While the Canadian dollar is one of the best performing
currencies, it's still more or less flat against the U.S.,"
said Jack Spitz, managing director of foreign exchange at
National Bank Financial.
 "Commodities are posting losses, Dow futures are
underwater, so both are likely to contribute to a move toward
the next level of decent resistance in dollar/Canada at
C$1.0140, which happens to be the overnight high."
 Overseas stocks were firmer on Wednesday as a deal on U.S.
tax cuts offered some optimism, which pushed the Canadian
dollar to an overnight high at C$1.0098 to the U.S. dollar, or
99.03 U.S. cents.
 But as the North American session began, U.S. stock index
futures indicated a mixed open and the price of oil was softer,
partly on mounting fears that China may soon raise interest
rates. The Canadian dollar often takes its cue from the price
of crude, a key Canadian export.
 Market players were also mulling the impact of a U.S.
proposal to extend tax cuts in the context of one senior
Chinese official's expression of concern about America's
long-term financial health. It also contrasts sharply with euro
zone governments, which are bearing down hard on public
deficits. [ID:nTOE6B7078] [MKTS/GLOB]
 Canadian bond prices slid on Wednesday, mirroring U.S.
Treasuries, as the tax cut proposal stoked fears over the U.S.
government's control of the budget deficit. [US/]
 The two-year bond CA2YT=RR was down 11 Canadian cents to
yield 1.690 percent, while the 10-year bond CA10YT=RR dropped
70 Canadian cents to yield 3.308 percent.
 (Reporting by Ka Yan Ng, Editing by Chizu Nomiyama)

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