CANADA FX DEBT-C$ little changed ahead of Nexen deal closure

Wed Feb 13, 2013 10:06am EST

* C$ at $1.0029 vs US$, or 99.71 U.S. cents
    * Nexen deal closes Feb 25, could boost the C$
    * Currency talk at the G20 meeting in Moscow this weekend in
focus

    By Solarina Ho
    TORONTO, Feb 13 (Reuters) - The Canadian dollar was steady
against the U.S. dollar on Wednesday following Tuesday's more
dramatic moves, with the currency expected to be mostly
sidelined until the $15.1 billion takeover of Nexen Inc 
by CNOOC Ltd closes.
    The Canadian dollar got a slight bo88ost on Tuesday after
U.S. regulators approved China's CNOOC takeover of the Canadian
oil and gas company. The deal is expected to close the week of
Feb 25. 
    "People took [the Nexen approval] to mean that there should
be some Canada-positive flow. Although it's very unclear as to
what that flow's going to be," said John Curran, senior vice
president at CanadianForex.
    If the Nexen deal does support the currency, Curran said it
could be an excellent opportunity to sell the Canadian dollar
for the medium term, given Canada's recent economic data and the
Bank of Canada's more dovish stance.
    "I think we are going to be sort of sidelined and remain
within this range until the 25th," he said.
    At 9:33 a.m. (1433 GMT), the currency was trading
at C$1.0029 versus the U.S. dollar, or 99.71 U.S. cents, little
changed from Tuesday's North American finish at C$1.0027, or
99.73 U.S. cents.
    The currency briefly strengthened to C$1.0022, or 99.78 U.S.
cents after the greenback pared gains following U.S. data that
showed retail sales in January barely rose.
  
    Curran expected the currency to trade between equal value
and C$1.0060 on Wednesday, where it was weaker against all other
major currencies, except the sterling.
    "The Canadian dollar isn't the major story out there when
you look at all the other currencies and what they are doing. So
we may be dragged around a little bit by the nose due to
cross-flows, which will all filter through to us," said Curran.
    Policymakers and investors worry that the new Japanese
government's push on its central bank for a looser monetary
policy, which has weakened the yen, could trigger far-reaching
currency wars.
    Exchange rates and the Japanese yen will likely be in the
spotlight this weekend when the Group of 20 wealthy and emerging
nations meet in Moscow. 
    Canadian government bonds fell across the curve, with the
price of the two-year bond down 4 Canadian cents to
yield 1.142 percent and the benchmark 10-year bond 
down 33 Canadian cents, yielding 2.035 percent.
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