November 14, 2011 / 9:45 PM / 9 years ago

CANADA FX DEBT-C$ ends lower on Italy, Greece caution

   * C$ ends at C$1.0169 vs US$, or 98.34 U.S. cents
 * Bonds higher across the curve as stocks fall
 (Updates to close)
 By Jennifer Kwan
 TORONTO, Nov 14 (Reuters) - The Canadian dollar slid lower
against the greenback on Monday as skeptical investors worried
about the ability of new governments in Italy and Greece to
resolve the debt crisis battering Europe.
 Global stocks and the euro sank as financial markets were
unnerved by an Italian bond auction on Monday that saw the
country pay a record euro-era high to sell five-year bonds.
 That added to concerns over the arrival of new government
leaders in both Italy and Greece, with investors uncertain
about what actions would follow in the two highly indebted
nations. [MKTS/GLOB]
 "It's again the same story as it's been for the past two
weeks. What's going on in Europe has been driving everything,"
said Charles St-Arnaud, Canadian economist and currency
strategist at Nomura Securities International in New York.
 "The market is not necessarily taking the resignation of
(Prime Minister Silvio) Berlusconi as absolutely a positive for
the euro zone. It could be a positive that there'll be a bit
less obstruction from the politics side, but there's still a
lot of uncertainty," he added.
 Former European Commissioner Mario Monti was asked to take
over as Italian prime minister, a move that observers hope will
help restore market confidence. [ID:nL5E7ME1YV] His appointment
comes as Lucas Papademos was named to head the Greek
 The Canadian dollar CAD=D3 ended at C$1.0169 versus the
greenback, or 98.34 cents U.S., down from a Friday afternoon
level of C$1.0112 to the U.S. dollar, or 98.89 U.S. cents,
according to Thomson Reuters data.
 Earlier on Monday, the Canadian dollar reached a high of
C$1.0080 to the U.S. dollar, or 99.21 U.S. cents.
 Camilla Sutton, chief currency strategist at Scotia
Capital, said she expected the currency to remain stuck in a
range of C$1.0080 to C$1.0270 to the U.S. dollar in the near
 Canadian government bond prices were higher on Monday as
the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE
closed lower in tandem with global markets. [MKTS/GLOB]
 "There's the traditional switch from equity to bonds that
is happening today," said St-Arnaud.
 The bond price movements also mirrored U.S. Treasuries,
which rose on Monday as nervousness over the effects of Italy's
still stressed debt valuations and weakening Spanish and French
debt valuations boosted demand for safe haven U.S. bonds.
 The two-year bond CA2YT=RR rose 5 Canadian cents to yield
0.906 percent, while the 10-year bond CA10YT=RR was up 28
Canadian cents to yield 2.109 percent.
 (Editing by Rob Wilson)

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