CANADA FX DEBT-Canadian dollar slips on weak global data

Wed Jan 16, 2013 9:28am EST

* C$ down at C$0.9875 vs US$, or $1.0127
    * Bond prices extend gains across curve

    By Claire Sibonney
    TORONTO, Jan 16 (Reuters) - The Canadian dollar drifted
lower against the U.S. dollar on Wednesday as poor global
economic data kindled fears about the health of the world
economy.
    A slow economic recovery in developed nations is holding
back the global economy, the World Bank said, as it sharply cut
its outlook for world growth in 2013. 
    Meanwhile, the economic outlook for the euro zone darkened
as data showed new-car sales in December had plunged to their
the lowest since 1995, with top producers like Volkswagen
suffering heavy falls. 
    The news comes a day after Germany said its economy shrank
at its fastest pace in almost three years in the final quarter
of 2012.
    "The Canadian dollar is weaker on general market sentiment,
which is shedding risk," said John Curran, senior vice president
at CanadianForex.
    At 9:14 a.m. (1414 GMT), the Canadian dollar was at
C$0.9875 versus the greenback, or $1.0127, softer than Tuesday's
North American session close at C$0.9841, or $1.0162.
    Still, Curran noted that the currency was still largely
rangebound on Wednesday, as it has been over the past couple
months, along with other commodity currencies.
    "People are comfortable with their levels against the U.S.
dollar for those currencies," he said. "There's still a bit of a
premium attached to all of them."
    Curran noted near-term Canadian dollar support around
C$0.9880. Breaching that level would open up further weakness
toward C$0.9920.
    Canadian bond prices picked up across the curve, following
U.S. Treasuries up as traders extended the previous day's gains
on mounting concerns about a looming political battle in
Washington to raise the government's debt limit. 
    Canada's two-year bond rose 3 Canadian cents to
yield 1.170 percent, while the benchmark 10-year bond
 added 19 Canadian cents to yield 1.887 percent.
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