CANADA FX DEBT-C$ little changed after U.S. data, Obama comments

Fri Nov 9, 2012 3:38pm EST

* C$ at C$1.0007 vs US$ or 99.93 U.S. cents
    * Earlier hit C$1.0034 vs US$, lowest level since Aug. 3
    * Bond prices ease across the curve

    By Claire Sibonney
    TORONTO, Nov 9 (Reuters) - The Canadian dollar recovered
from a more than three-month low against its U.S. counterpart on
Friday, tracking a modest rebound in equity and commodity
markets after encouraging U.S. economic data.
    An increasingly upbeat view of the economy and jobs market
drove U.S. consumer sentiment to a more than five-year high in
early November, while a jump in wholesale inventories suggested
the economy grew more than initially estimated last quarter.
 
    "It's somewhat of a disappointing bounce given the drastic
decline in sentiment in the post-election period. That said, the
Canadian dollar has weathered the storm admirably," said Adam
Button, currency analyst at ForexLive in Montreal.
    By late afternoon, the currency was near break-even for the
day, after comments by U.S. President Barack Obama and House of
Representatives Speaker John Boehner left investors little hope
that a deal to avoid the "fiscal cliff" was on the horizon.
 
    Financial markets fear that the $600 billion in automatic
spending cuts and tax rises set to begin in January, unless an
agreement is reached on addressing the budget deficit, will
drive the United States back into recession.
    By 3:25 p.m. (1925 GMT), the Canadian dollar stood
at C$1.0007 versus the U.S. dollar, or 99.93 U.S. cents, little
changed from Thursday's North American session close at C$1.0004
to the U.S. dollar, or $0.9996.
    Earlier, the currency slipped to C$1.0034, or 99.66 U.S.
cents, its weakest level since Aug. 3.
    Analysts said C$1.0040 was the next significant level of
resistance for the U.S. dollar versus Canada's.
    The Canadian dollar was outperforming other major
currencies, including the euro, which slipped near a
one-week low.
    Weighing against the euro was talk about Europe's crisis
extending its reach to France and Germany. 
 
    Investors were wary, too, before a Greek parliament vote on
Sunday on its 2013 budget. The budget must be passed to unlock a
further tranche of international aid. 
    "For Canada, it's more a story of there hasn't been any
specific domestic news that has hurt us," said Camilla Sutton,
chief currency strategist at Scotiabank.
    Even better-than-expected Chinese economic data for October,
which pointed to a modest rebound in the world's second largest
economy, was largely overlooked.
    The price of Canadian government debt reversed earlier gains
and eased across the curve. The two-year government-of-Canada
bond was down 3 Canadian cents to yield 1.085
percent, while the benchmark 10-year bond was off 3
Canadian cents to yield 1.715 percent.
FILED UNDER:
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article