December 16, 2010 / 1:30 PM / 10 years ago

CANADA FX DEBT-C$ little changed, eyes EU summit, data

 * C$ flat at 99.55 U.S. cents
 * Canadian bond prices tick up across curve
 By Jennifer Kwan
 TORONTO, Dec 16 (Reuters) - Canada's dollar traded flat on
Thursday morning, largely in line with global equity markets,
as investors took pause after coming within a tick of parity
with the U.S. currency the day before.
 European shares shed early gains and peripheral euro zone
bonds dipped on Thursday after Spain paid a high premium at a
debt auction, while U.S. stock index futures signaled a weaker
open. [MKTS/GLOB] [.N]
 Strategists said a key market focus on Thursday is expected
to be a summit at which EU leaders will discuss the region's
debt crisis. [ID:nLDE6BE29I]
 For the most part, however, the Canadian currency took a
breather after hitting C$1.0001 to the U.S. dollar, or 99.99
U.S. cents, on Wednesday, said Blake Jespersen, director,
foreign exchange sales at BMO Capital Markets.
 "It took a good run at parity, but just ran into too many
sellers of the Canadian dollar," he said.
 "The fact that it's still hanging very close to that level
means I think we're going to eventually take it out. If not,
then the next few days."
 In the meantime, the market will likely draw direction from
movements in equity and commodity markets, as well as U.S. data
including housing starts, building permits and initial jobless
claims. On tap in Canada is international securities
transactions. [O/R] [MET/L] ECONUS
 Much of the trade in coming sessions could also be
flow-driven, said Jespersen.
 "I think you're getting into some of the year end, call it,
complacency," he said.
 "There has been good liquidity, though. In terms of flow
we've seen very good two-way flow from all kinds of different
clients. The markets are active but just not volatile."
 At 8:00 a.m. (1300 GMT), the Canadian dollar CAD=D4 stood
at C$1.0045 to the U.S. dollar, or 99.55 U.S. cents, a hair
lower from Wednesday's close at C$1.0040 to the U.S. dollar, or
99.60 U.S. cents.
 Bonds were flat to slightly higher across the curve with
the interest-rate sensitive two-year bond CA2YT=RR up 4
Canadian cents to yield 1.711 percent, while the 10-year bond
CA10YT=RR climbed 18 Canadian cents to yield 3.306 percent.
 (Reporting by Jennifer Kwan, Editing by Chizu Nomiyama)

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