August 25, 2009 / 3:12 PM / 11 years ago

CANADA FX DEBT-C$ turns lower after upbeat U.S. data

 * C$ at C$1.0804, or 92.56 U.S. cents
 * U.S. consumer confidence rises in August
 * Bond prices flat across the curve
 (Recasts, updated throughout)
 By Frank Pingue
 TORONTO, Aug 25 (Reuters) - Canada's dollar unraveled its
early gains and turned lower on Tuesday morning as data from
the United States came in better than expected and offered a
bid to the greenback.
 The turnaround in the Canadian dollar came after data
showed U.S. consumer confidence rose more than expected in
August on an improved outlook for the job market and the
overall economy. [ID:nN25200381]
 That data followed an earlier report that showed prices of
U.S. single-family homes rose for the second consecutive month
in June, adding to evidence that the three-year housing slump
is easing. [ID:nNYS005335]
 The upbeat data lent an immediate boost to the greenback, a
departure from earlier in the summer when positive news would
boost the Canadian dollar by convincing investors to do away
with the safe-haven appeal of the U.S. currency.
 "Whereas the safe-haven trade was the dominant theme for
many months, it seems as though economic health is actually a
positive for the U.S. dollar," said Eric Lascelles, chief
economics and rates strategist at TD Securities.
 "So the fact that we have seen some very nice home price
and confidence data in the U.S. seems to be a rather positive
improvement for the U.S., and it's something that is holding
back the Canadian dollar.
 At 10:55 a.m. (1455 GMT), the Canadian unit was at C$1.0804
to the U.S. dollar, or 92.56 U.S. cents, down from C$1.0770 to
the U.S. dollar, or 92.85 U.S. cents, at Monday's close.
 Earlier, the Canadian dollar rallied to C$1.0718 to the
U.S. dollar, or 93.30 U.S. cents, its highest level since Aug.
6, as North American equities were poised for a higher open.
 No Canadian data is due on Tuesday, but traders may keep an
eye on a speech by Timothy Lane, a deputy governor of the Bank
of Canada. He will be speaking on "The Canadian Economy Beyond
the Recession" in Kingston, Ontario, at 1 p.m. (1700 GMT).
 Canadian bond prices were mostly unchanged across the curve
as the latest data from the United States left little interest
in more secure assets like government debt.
 The two-year Canadian bond CA2YT=RR was down 1 Canadian
cent at C$99.37 to yield 1.318 percent, while the 10-year bond
CA10YT=RR rose 10 Canadian cents to C$102.70 to yield 3.421
 The 30-year bond CA30YT=RR was up 15 Canadian cents at
C$118.45 to yield 3.905 percent.
 (Editing by Rob Wilson)

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