September 29, 2009 / 9:08 PM / 11 years ago

CANADA FX DEBT-C$ ends higher, bonds seesaw with US data

 * Canadian dollar inches up to 92.12 U.S. cents
 * Bonds little changed after U.S. data a wash
 * Canadian GDP on tap for Wednesday
 (Updates to close)
 TORONTO, Sept 29 (Reuters) - The Canadian dollar finished
slightly higher versus the U.S. currency on Tuesday, but
remained in its recent trading range as economic data failed to
push it strongly either way.
 With no major Canadian economic data on tap until
Wednesday, currency and bond markets looked to Tuesday's slate
of U.S. figures for direction.
 The S&P/Case-Shiller report showed U.S. single-family home
prices rose in July from the previous month, surpassing
forecasts and bolstering the case for housing market stability
after a three-year plunge. [ID:nNYS005445]
 Meanwhile, the Conference Board's index on U.S. consumer
confidence slipped to 53.1 in September. Economists had
expected an improvement to 57.0 from an upwardly revised 54.5
in August. [ID:nNYS005447]
 Neither report prompted a major reaction, nor did a report
that showed consumer confidence in Canada improved for a
seventh straight month in September. [ID:nN29135851]
 "The market is rather complacent and there's no real
direction for the next extended move," said John Curran, senior
vice president at CanadianForex, a commercial foreign exchange
dealing firm.
 The Canadian dollar finished at C$1.0855 to the U.S.
dollar, or 92.12 U.S. cents, up slightly from C$1.0875 to the
U.S. dollar, or 91.95 U.S. cents, at Monday's close.   
 "Realistically, we're range-bound in the Canadian dollar
between C$1.06 and C$1.11," Curran said. "People are looking
for real evidence to send us one way or another. Until then,
we're pretty much range-bound."
 A slight weakening in the oil price [O/R] and moderate
firmness in Canadian equity markets seemed to leave the
Canadian dollar in neutral on Tuesday. Equity and energy
markets often sway the direction of the currency as they are
seen as barometers of risk appetite.
 Canadian bonds felt early downward pressure from the U.S.
housing data but recouped nearly all their losses after the
U.S. consumer confidence report.
 "The flow of data that we had from the U.S. was almost
perfectly offsetting. The pleasant surprise on home prices was
almost exactly offset by the nasty surprise on consumer
confidence," said Doug Porter, deputy chief economist at BMO
Capital Markets.
 The week is fairly data-heavy in the United States, with
jobless claims, regional surveys such as the Chicago PMI, and
personal income data still to come. It will be capped off with
the September U.S. jobs figures, the latest read on whether the
U.S. economic recovery is taking hold.    
 In Canada, the only notable release this week is on
Wednesday when the gross domestic product report for July is
expected to show the third quarter began positively, supporting
views that the economy is slowly emerging from recession.
Economists, on average, expect the economy to have grown 0.4
percent in July. ECONCA
 The two-year bond CA2YT=RR dipped 1 Canadian cent to
C$99.47 to yield 1.281 percent, while the 10-year bond
CA10YT=RR fell 3 Canadian cents to C$103.40 to yield 3.335
percent. The 30-year bond CA30YT=RR dropped 10 Canadian cents
to C$119.15 to yield 3.866 percent.
 Separately IFR, a Thomson Reuters service, reported that
the province of Ontario sold $2 billion in 10-year notes,
priced 73 basis points over U.S. Treasuries. [ID:nN29155031]
 (Reporting by Ka Yan Ng; editing by Peter Galloway)

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