CANADA FX DEBT-C$ rises as Fed expected to expand stimulus

Wed Dec 12, 2012 7:58am EST

* C$ at C$0.9858 to US$, or $1.0144
    * U.S. Fed expected to provide further monetary stimulus

    By Alastair Sharp
    TORONTO, Dec 12 (Reuters) - The Canadian dollar firmed
slightly on Wednesday as investors turned their focus to the end
of a U.S. Federal Reserve meeting and an expected announcement
of further monetary stimulus.
    Markets expect the Fed to expand its current asset purchase
scheme, committing to buy $45 billion of U.S. debt and extend
its purchases of mortgage-backed debt to help sustain the
fragile U.S. economic recovery. 
    "All the risk currencies are performing well today," said
Adam Cole, global head of FX strategy at Royal Bank of Canada.
"It's a risk-on day generally....expectations for the Fed are
probably behind that to a degree."
    Oil, gold and copper prices were all higher, at least in
part on hopes for Fed action.   
    At 7:44 a.m. (1244 GMT) the Canadian dollar was
trading at C$0.9858 to the greenback, or $1.0144, compared with
C$0.9862, or $1.0140, at Tuesday's North American close.
    The Canadian dollar was underperforming other
resource-linked currencies including the Australian 
and New Zealand dollars, as well as the euro
 and British pound.
    Canadian government debt prices were lower across the curve,
with the two-year bond off 2 Canadian cents to yield
1.087 percent, while the benchmark 10-year bond fell
14 Canadian cents to yield 1.745 percent.
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