August 23, 2011 / 1:27 PM / 9 years ago

CANADA FX DEBT-C$ edges higher on retail sales, risk appetite

 * C$ edges up to C$0.9876 to the U.S. dollar, or $1.0126
 * Bond prices fall as risk sentiment perks up again
 * Autos propel Canadian retail sales higher in June
 By Ka Yan Ng
 TORONTO, Aug 23 (Reuters) - The Canadian dollar added to
gains against the U.S. currency on Tuesday after domestic data
showed retail sales grew for a third straight month.
 Retail sales in June were up 0.7 percent from May as auto
sales roared back to life, Statistics Canada data showed. The
increase matched forecasts. For details, see [ID:nN1E77M09U]
 Excluding autos, sales fell by 0.1 percent in the month
versus market expectations for a 0.2 percent increase. But
May's advance was revised up to 0.3 percent from an initial 0.1
percent, and in volume terms, sales rose 1.6 percent.
 "Kind of mixed, but I would say a net positive. Part of why
CAD just hasn't moved on that is just that we're seeing a
little bit of weakness coming out of euro right now," said
Camilla Sutton, chief currency strategist at Scotia Capital.
 "All in all, the U.S. dollar is materially weaker today and
that is the broader trend. Equities are stronger, volatility is
lower, so risk appetite is increasing as the market gets
excited about what (U.S. Federal Reserve Chairman Ben) Bernanke
might say."
 The annual central bankers gathering in Jackson Hole,
Wyoming, late this week remains the key event of the week.
 Investors were more willing to take on riskier assets, such
as stocks and some commodities, after gauges of Chinese and
euro zone economic activity came in less gloomy than feared.
That pushed lingering worries of the euro zone debt crisis
aside, putting pressure on bond pricing. [MKTS/GLOB]
 At 9:09 a.m. (1309 GMT), the Canadian dollar CAD=D4 was
at C$0.9876 to the U.S. dollar, or $1.0126, up from C$0.9901 to
the U.S. dollar, or $1.01, at Monday's session close.
 The two-year bond CA2YT=RR was off 4 Canadian cents to
yield 0.892 percent, while the 10-year bond CA10YT=RR edged
down 20 Canadian cents to yield 2.329 percent.
 Investors were waiting to see whether the U.S. Federal
Reserve announces further economic stimulus, a year after
Bernanke launched a second round of quantitative easing to
revive the U.S. economy.
 Jean Boivin, deputy governor at the Bank of Canada, is due
to speak in Kingston, Ontario Tuesday in a speech titled "How
people think and how it matters."
 Analysts were not expecting Bernanke's speech on Friday to
differ much from last week's testimony to a parliamentary
committee by Bank of Canada Governor Mark Carney.
  (Reporting by Ka Yan Ng; editing by Jeffrey Benkoe)

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