November 19, 2009 / 2:33 PM / 11 years ago

CANADA FX DEBT-C$ dragged to lowest level since Nov. 9

 * C$ falls as low as C$1.0638 per US$
 * Canadian data shows signs of growth
 * Bond prices higher across the curve
 By Frank Pingue
 TORONTO, Nov 19 (Reuters) - The Canadian dollar slid to its
lowest level in over a week on Thursday as risk appetite dried
up overnight on concern emerging economies could introduce more
capital controls to stem speculative flows.
 The lessened demand for riskier assets was triggered by
news of Brazil's latest attempt to curb foreign inflows into
its soaring currency, which fanned fears more Asian nations may
slap controls on capital flows. [ID:nN18128104]
 "That just sent a little bit of a twang down the markets
and stocks obviously had a rough night overnight," said Steve
Butler, director of foreign exchange trading at Scotia Capital.
"So we saw a little bit of a reversal in fortunes and the
(U.S.) dollar took off overnight and Canada took out a bit of
resistance up around the C$1.0620 level."
 Also weighing on the domestic currency were investors
gripped by nagging uncertainty over the global economy's future
and a tendency to lock in some profits before year end.
 That sentiment combined to send the Canadian dollar as low
as C$1.0638 to the U.S. dollar, or 94 U.S. cents, its lowest
level since Nov. 9.
 News that Canada's economy is showing signs of growth had
little impact on the currency as the reports are considered
second-tier data. [ID:nN19165141]
 By 9:15 a.m. (1415 GMT), the Canadian unit was at C$1.0614
to the U.S. dollar, or 94.22 U.S. cents, down from C$1.0545 to
the U.S. dollar, or 94.83 U.S. cents, at Wednesday's close.
 Canadian bond prices were up across the curve as investors
were expected to unload riskier assets like stocks in favor of
government debt after the latest U.S. weekly job claims data.
 According to the report, the number of workers filing new
applications for jobless insurance was unchanged last week, but
the four-week moving average of claims dropped to its lowest in
almost a year. [ID:nN18123033]
 The two-year Canada bond was up 7 Canadian cents at C$99.95
to yield 1.278 percent, while the 30-year bond rose 14 Canadian
cents to C$102.80 to yield 3.402 percent.
 Canadian bonds underperformed U.S. Treasuries across much
of the curve. The Canadian 10-year yield was 6.4 basis points
above its U.S. counterpart, compared with 5.2 basis points on
 (Reporting by Frank Pingue; Editing by Jeffrey Hodgson)

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