CANADA FX DEBT-C$ edges higher in quiet U.S. Thanksgiving trade

Thu Nov 22, 2012 8:09am EST

* China HSBC PMI indicates pace of growth increase
    * U.S. markets closed for Thanksgiving
    * C$ at C$0.9955 vs US$, or $1.0045
    * Canada retail sales at 8:30 a.m.

    By Solarina Ho
    TORONTO, Nov 22 (Reuters) - The Canadian dollar was
marginally higher against the U.S. dollar on Thursday as
encouraging data from China provided a more positive tone to
market sentiment, but overall trading was quiet due to the U.S.
Thanksgiving holiday.
    China's vast manufacturing sector saw expansion accelerate
in November for the first time in 13 months, preliminary results
from an HSBC manufacturing survey showed, a sign that the pace
of economic growth has revived after seven consecutive quarters
of slowdown. 
    "That's kind of a put a small risk-on tone to the market.
Even though the U.S. is not around, equity futures are trading
higher," said David Bradley, director of foreign exchange
trading at Scotiabank.
    At 7:56 a.m. (1256 GMT), the Canadian dollar was
trading at C$0.9955 to the U.S. dollar, or $1.0045. This was
slightly higher than Wednesday's North American close at
C$0.9965, or $1.0035.
    The currency was mostly weaker against other major
currencies, including the euro.
    "There's been very little reaction outside of the euro.
Aussie, Kiwi, Canada, are all really really lagging the euro
move," said Bradley, adding Canada's dollar was likely to remain
in a tight trading range.
    In Canada, retail sales data at 8:30 a.m. will be the main
economic highlight.
    "Even if the data does come in far from expectations I don't
think we're going to get too much of a move in USD/CAD," said
Bradley, noting there may be an initial reaction before the
currency moves back to current levels.
    Prices for Canadian government debt were weaker across the
curve, with the two-year bond off 1 Canadian cent to
yield 1.121 percent and the benchmark 10-year bond 
slipping 14 Canadian cents to yield 1.778 percent.
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