June 22, 2011 / 6:49 PM / 9 years ago

CANADA FX DEBT-C$ hits one-week high after Fed statement

   * C$ rises to C$0.9714 to the U.S. dollar, or $1.0294
 * Bond prices flat to higher
 * Fed downgrades economic assessment, sees pickup
 (Adds details)
 TORONTO, June 22 (Reuters) - The Canadian dollar rose to a
one-week high against the greenback on Wednesday as U.S.
Federal Reserve Chairman Ben Bernanke began speaking to the
press after earlier lowering the U.S. economic outlook.
 The U.S. central bank, which left interest rates unchanged
as expected, offered no hint of further monetary support,
saying growth should pick up soon. [ID:nN1E75K22F]
 The Fed said the pace of U.S. economic recovery was
proceeding more slowly than it had expected, but it expressed
hope that growth would pick up soon. [ID:nN1E75K22F]
 "All in all, the expectation is that growth has somewhat
slowed, the labor force is still weak, and the Fed is still
very dovish. All that should help create U.S. dollar weakness,"
said Camilla Sutton, chief currency strategist at Scotia
  The Canadian currency pushed as high as C$0.97 to the U.S.
dollar, or $1.0309, its highest level since June 15. By 2:41
p.m. (1841 GMT), the currency CAD=D4 had pared some gains,
and was at C$0.9714 to the U.S. dollar, or $1.0294, up from
Tuesday's North American finish at C$0.9724 or $1.0284.
 It had clawed back from early weakness -- falling as low as
C$0.9754 to the U.S. dollar, or $1.0252 -- on relief that
Greece had overcome a key hurdle to a debt deal with the
government surviving a parliamentary confidence vote.
 But pressure was still on the debt-ridden country to
approve tough austerity measures before it gets fresh funding
from the European Union and the International Monetary Fund.
 Canadian government bond prices were flat to higher across
the curve, tracking their U.S. counterparts, after the Fed
lowered the growth outlook.
 The two-year bond CA2YT=RR rose 3 Canadian cents to yield
1.505 percent, while the 10-year bond CA10YT=RR climbed 15
Canadian cents to yield 2.963 percent.
 (Reporting by Ka Yan Ng, additional reporting by Solarina Ho;
editing by Rob Wilson)

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