CANADA FX DEBT-Canada dollar rebounds to end little changed

Tue Jun 11, 2013 5:05pm EDT

* C$ ends at C$1.0189 vs US$, or 98.15 U.S. cents
    * Bond higher across curve


    By Cameron French
    TORONTO, June 11 (Reuters) - The Canadian dollar ended
nearly flat versus the U.S. dollar on Tuesday, rebounding from
early-session weakness as investors sold the U.S. currency
versus the Japanese yen.
    "The yen just hit this massive air pocket ... and it's
spilled over to the Canadian dollar and elsewhere in the foreign
exchange market. It was clearly a theme of selling the dollar,"
said Adam Button, a currency analyst at ForexLive in Montreal.
    That brought the Canadian dollar back from a sharp drop in
the overnight session as investors avoided risk following signs
that major central banks are easing off on their aggressive
economic stimulus policies.
    The Canadian economy's heavy weighting of commodities such
as oil and base metals means that the currency generally falls
when investors sour on risky assets.
    The Canadian dollar ended the session at C$1.0189
versus the U.S. dollar, or 98.15 U.S. cents, its highest close
in more than three weeks, and up a touch from Monday's North
American session close at C$1.0190, or 98.14 U.S. cents.
    Overnight, the Bank of Japan held back from taking
additional measures to tackle rising government bond yields,
causing a selloff in global equity markets. 
    This follows recent speculation on when the U.S. Federal
Reserve would begin scaling back its quantitative easing. More
aggressive stimulus action helps boost risk sentiment because it
provides more support and growth for the economy.
    Prices for Canadian government debt were higher across the
maturity curve, with the two-year bond up 3 Canadian
cents to yield 1.150 percent, and the benchmark 10-year bond
 up 28 Canadian cents to yield 2.171 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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