July 22, 2009 / 1:38 PM / 11 years ago

CANADA FX DEBT-C$ gets boost after upbeat retail sales data

 * C$ higher, but stuck in tight range
 * Canadian retail sales top estimates
 * Bond prices give back recent gains
 By Frank Pingue
 TORONTO, July 22 (Reuters) - The Canadian currency was up
slightly versus the U.S. dollar on Wednesday, helped in part by
strong domestic retail sales data and a recent string of upbeat
comments from central bankers.
 Helping boost the Canadian dollar back toward the near
six-week high it hit on Monday was data that showed Canadian
retail sales rose 1.2 percent in May from April, which topped
expectations for a gain of 0.5 percent. [ID:nOTT001664]
 The gain follows a more optimistic statement from the Bank
of Canada on Tuesday, a more upbeat Australian central bank and
recent talk of economic growth by the Bank of England.
 "We still think it's probably a sell on rallies and so we
have to wait and see what the risk appetite is for the rest of
the day here," said Shaun Osborne, chief currency strategist at
TD Securities.
 "We had a pretty good run of equity market gains, positive
comments from central bankers and earnings have generally been
a bit better than expected ... so I think the risk appetite is
simmering under the surface and that should keep the Canadian
dollar fairly well supported."
 At 9:20 a.m. (1320 GMT), the Canadian unit was at C$1.1049
to the U.S. dollar, or 90.51 U.S. cents, up from C$1.1071 to
the U.S. dollar, or 90.33 U.S. cents, at Tuesday's close.
 But the move was held in check and the currency stuck to a
tight range given a slide in global stocks and nagging concerns
over a warning of rising unemployment from U.S. Federal Reserve
Chairman Ben Bernanke on Tuesday.
 On Tuesday the Canadian currency rallied to C$1.0965 to the
U.S. dollar, or 91.19 U.S. cents, which was its highest level
since June 11. But it gave back all the gains in the aftermath
of the Bernanke comments.
 The Canadian dollar is up about 18 percent since it tumbled
to a four-year low of C$1.3066 to the U.S. dollar, or 76.53
U.S. cents, in early March.
 Canadian bond prices were down across the curve given the
combination of the better-than-expected retail sales data and
dealers who opted to book profits after the gains recorded in
Tuesday's session.
 With no major Canadian data due for the rest of the
session, domestic bond prices are expected to track moves in
the bigger U.S. Treasury market.
 The two-year Canada bond was down 4 Canadian cents at
C$100.07 to yield 1.211 percent, while the 10-year bond slipped
20 Canadian cents to C$102.55 to yield 3.442 percent.
 The 30-year bond dropped 80 Canadian cents to C$116.50 to
yield 4.010 percent. The 30-year U.S. Treasury bond yielded
4.404 percent.
 (Editing by Jeffrey Hodgson)

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