February 8, 2011 / 1:18 PM / 9 years ago

CANADA FX DEBT-Canadian dlr pares gains after China rate rise

 * C$ slightly firmer at $1.0105
 * Bonds ease across the curve
 TORONTO, Feb 8 (Reuters) - Canada's dollar pared overnight
gains against the U.S. currency on Tuesday after China raised
interest rates for the second time in just over a month.
 The Canadian dollar, like its commodity-sensitive
Australian cousin, retreated from session highs as oil prices
fell after China's central bank raised interest rates by 25
basis points. For details, see [ID:nTOE706030] [O/R] [FRX/]
 Still, world stocks held near the previous day's 29-month
high as China's monetary tightening did little to immediately
change the favorable outlook for global growth this year.
 At 7:55 a.m. (1255 GMT), the Canadian dollar CAD=D4 was
at C$0.9896 to the U.S. dollar, or $1.0105, retreating from an
overnight high at C$0.9869 to the U.S. dollar, or $1.0133.
 It was also a touch firmer than Monday's North American
session close at C$0.9902 to the U.S. dollar, or $1.0099.
 "Canada is more or less flat to where it was yesterday.
It's still consolidation for Canada," said Jack Spitz, managing
director of foreign exchange at National Bank Financial.
 "Price action has been muted for quite some time, with the
exception of a few notable days. It's waiting for the next leg
up or down."
 He said he was eyeing C$0.9832, which is the 2011 high, as
well as C$0.9925, which represents the 20-day moving average.
 Canadian government bond prices eased across the curve,
tracking U.S. Treasuries, as investors prepared for $72 billion
of new debt to be auctioned this week.
 The two-year bond CA2YT=RR was off 5 Canadian cents to
yield 1.858 percent, while the 10-year bond CA10YT=RR slipped
15 Canadian cents to yield 3.453 percent.
  (Reporting by Ka Yan Ng; editing by Jeffrey Benkoe)

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