May 12, 2008 / 11:57 AM / 11 years ago

Canadian dollar little changed in lackluster trade

 By Frank Pingue
 TORONTO, May 12 (Reuters) - The Canadian dollar was mostly
flat against the U.S. dollar on Monday and stuck in a range as
there was little economic data to consider and oil prices eased
from the record high hit last week.
 Domestic bond prices were largely unchanged.
 At 7:50 a.m. (1150 GMT), the Canadian unit was at C$1.0048
to the U.S. dollar, or 99.52 U.S. cents, up from C$1.0056 to
the U.S. dollar, or 99.44 U.S. cents, at Friday's close.
 During the overnight session, the Canadian currency held in
a tight range of C$1.0108 to the U.S. dollar, or 98.93 U.S.
cents, and C$1.0043 to the U.S. dollar, and 99.57 U.S. cents.
 Trading during the overnight session was rather muted as
many European markets were closed for holidays.
 "We're quite rangebound really," said Adam Cole, global
head of FX strategy at RBC Capital Markets in London. "And
we've been quite devoid of news flow in what is a going to be a
busy week as things get moving from tomorrow onward."
 The only Canadian data due this week are the new housing
price index for March at 8:30 a.m. and Thursday's survey of
manufacturing for March.
 But none of the data due this week is likely to alter the
market's expectations for domestic interest rates. The Bank of
Canada is still expected to lower its key rate by 25 basis
points to 2.75 percent at its next scheduled announcement date
on June 10.
 Canadian Finance Minister Jim Flaherty will give a speech
on "Canada and the Global Economy" to the Economic Club of
Toronto around 8:20 a.m.
 While the speech is not expected to draw much market
attention, comments to the media afterward will be perused
 Last week the commodity-linked Canadian dollar was offered
support from oil prices which rose to a record above $126 a
barrel. The prices of oil has backed off its peak but has stuck
near the lofty level and is keeping the Canadian dollar from
 Bond prices were mostly unchanged alongside the flat U.S.
Treasury market, which often sets direction for Canadian bond
prices when there is a lack of domestic news.
 The two-year bond was up 1 Canadian cent at C$102.03 to
yield 2.726 percent. The 10-year was unchanged at C$103.18 to
yield 3.585 percent.
 The yield spread between the two- and 10-year bonds was
84.6 basis points, down from 85.6 at the previous close.
 The 30-year bond was off 5 Canadian cents at C$115.50, for
a yield of 4.083 percent. In the United States, the 30-year
treasury yielded 4.527 percent.
 The three-month when-issued T-bill yielded 2.65 percent, up
from 2.62 percent at the previous close.
 (Editing by Bernadette Baum)

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