C$ to weaken back under parity-Bank of Canada survey

Fri Nov 23, 2012 4:57pm EST

Related Topics

* Hedging clients of banks saw C$ weaker in 2012, 2013
    * Survey conducted in from June to August

    OTTAWA, Nov 23 (Reuters) - Companies and institutional
investors who hedge their Canadian dollar exposure through major
banks expect the currency to fall back under parity with the
U.S. dollar in 2013, a Bank of Canada survey showed on Friday.
    The central bank conducted the survey of banks that are
active in Canadian foreign exchange hedging from June to August,
a period when the Canadian dollar was largely weaker than the
U.S. dollar.
    It found the banks' average estimate of their clients'
budgeted Canadian dollar rate for 2013 is C$1.0119 to the U.S.
dollar, or 98.82 U.S. cents. The rate for 2012 is C$1.0075 per
U.S. dollar, or 99.26 U.S. cents, the survey showed.
    On Friday afternoon, the Canadian currency stood at
C$0.9922 per U.S. dollar, or $1.0079.
    "The Canadian dollar is largely anticipated to remain little
changed over the next year with banks noting that most accounts
do not expect the Canadian dollar to trade significantly outside
a (US$)0.98-(US$)1.03 range," the bank said.
    "They noted that their customers felt little pressure to
hedge due to expectations that the currency would remain steady,
with clients choosing to wait for a more opportunistic level to
hedge, within the anticipated range."
    The report added that as a result of that view, many
corporate clients were choosing to cover exposures in the spot
market, or hedge for less than one month.
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.