CANADA FX DEBT-C$ steady on cautious sentiment; eye on retail sales

Mon Apr 22, 2013 4:40pm EDT

* C$ closes at C$1.0261 vs US$, or 97.46 U.S. cents
    * Canadian retail sales on Tues key data this week

    By Solarina Ho
    TORONTO, April 22 (Reuters) - The Canadian dollar ended
little changed against its U.S. counterpart on Monday, following
a dismal prior week, with a dearth of economic data and news
keeping the currency steady.
    The currency touched its weakest level of the day shortly
after U.S. data showed home resales edged downward in March,
pointing to some slowdown in the housing market recovery pace as
overall economic activity cooled. 
    The commodities-linked Canadian dollar was trading in a
tight 38-point range between C$1.0248 and C$1.0286 after
weakening off 1.2 percent last week in reaction to plunging
commodity prices.
    "It's been a very quiet day overall. It's more a day of
consolidation, rather than anything else. The market generally
still seems to be a little bit nervous," said Shaun Osborne,
chief currency strategist at TD Securities.
    "We're still seeing the U.S. numbers come in on the softer
side of expectations."
    The Canada's dollar finished its North American
session at C$1.0261 against the U.S. dollar or 97.46 U.S. cents,
little changed from Friday's finish at C$1.0263, or 97.44 U.S.
cents.
    The Group of 20 countries over the weekend stopped short of
criticizing the radical easing steps which the Bank of Japan
says are aimed at battling deflation, with any currency weakness
simply a byproduct.  
    Outgoing Bank of Canada Governor Mark Carney also slashed
growth forecasts last Wednesday, which added to some of the
currency's weakness.
    "Last week was a pretty big week for us in terms of domestic
events with the (Bank of Canada's Monetary Policy Report) and so
on," said Mark Chandler, head of Canadian fixed income and
currency strategy at Royal Bank of Canada.
    "The G20 meeting, if anything, gives the green light for the
Bank of Japan to continue to have accommodative policy. That's
underpinned a bit of a risk-on tone and generally helped riskier
commodity-based currencies such as Canada, but it's very, very,
very small."
    Looking ahead, retail sales on Tuesday will be the main
economic data for Canada this week while first-quarter GDP
figures on Friday will be the key U.S. data.  
    "If there's anything that's waiting out there for the
Canadian dollar it's probably the announcement of a new Bank of
Canada governor," said Chandler.
    Current deputy Tiff Macklem is unanimously expected to be
the successor to Carney, according to a Reuters poll.
 
    Should there be a surprise appointment, there is a risk of
the Canadian dollar weakening, said Chandler.
    Canadian government bond prices were mixed, with the
two-year bond off half a Canadian cent with a yield
of 0.942 percent, while the benchmark 10-year bond 
shed 1 Canadian cents to yield 1.710 percent.
FILED UNDER:
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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