CANADA FX DEBT-C$ steady vs firmer US$; Fed and BOC's Poloz in focus

Mon Jun 17, 2013 9:47am EDT

* C$ at C$1.0165 vs US$, or 98.38 U.S. cents
    * Equity markets recoup some of last week's losses
    * Federal Reserve and Bank of Canada in focus this week
    * Bond prices higher across maturity curve

    By Solarina Ho
    TORONTO, June 17 (Reuters) - The Canadian dollar held steady
against a stronger U.S. counterpart on Monday, with investor
appetite for riskier assets returning ahead of the Federal
Reserve's latest policy statement later this week.
    Global equity markets recouped some of last week's losses
overnight, with investors hoping that the Fed will offer a more
cautious tone to reining in stimulus when it concludes a two-day
meeting on Wednesday.  
    "We had some better risk sentiment overnight ... It kind
transpired in the European session, where you're seeing equities
up across the board. That's providing a more positive backdrop
for the Canadian dollar," said Charles St-Arnaud, an economist
and currency strategist at Nomura Securities in New York, who
also noted a very modest increase in commodity prices.
    "Not major, but it's a move in the right direction at least
to support the Canadian currency."
    The Canadian dollar, which was trading in a narrow
29-point range between C$1.0150 and C$1.0179, was trading at
C$1.0165 versus the greenback, or 98.38 U.S. cents at 9:30 a.m.
(1330 GMT). This was little changed from its Friday close at
C$1.0169, or 98.34 U.S. cents.
    The Canadian dollar was mostly stronger against other
currencies but underperforming its Australian and New
Zealand commodity counterparts.
    Nomura said most of the currency market is expected to
relatively quiet until the Fed on Wednesday.
    The Bank of Canada's new head, Stephen Poloz, will be giving
his first official speech on Wednesday, which is also likely to
garner scrutiny as the market tries to pin the governor's policy
stance. Poloz made his first public appearance two weeks earlier
 in front of parliament. 
    Separately, data on Monday showed that foreign investors had
an increased appetite for Canadian securities in April, adding
C$14.91 billion to their portfolios compared with C$956 million
in March. 
    Government bond prices rose across the maturity curve, with
the two-year bond up half a Canadian cent to yield
1.107 percent, and the benchmark 10-year bond up 4
Canadian cents to yield 2.116 percent.
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