CANADA FX DEBT-C$ dips as data boosts greenback before Fed meeting

Mon Jun 17, 2013 5:00pm EDT

* C$ at C$1.0177 vs US$, or 98.26 U.S. cents
    * NY manufacturing and U.S. housing sentiment data positive
    * Equity markets recoup some of last week's losses
    * U.S. Federal Reserve and Bank of Canada in focus this week

    By Solarina Ho
    TORONTO, June 17 (Reuters) - The Canadian dollar softened
marginally against the U.S. dollar on Monday with the greenback
gathering strength on positive data, but much of the market was
sidelined ahead of the two-day U.S. Federal Reserve policy
meeting that starts Tuesday.
    The U.S. currency extended gains after figures showed growth
in New York state's manufacturing sector picked up in June, and
that sentiment among U.S. homebuilders surged to the highest
level in seven years. 
    "Really kind of a lackluster day ... It ebbed and flowed a
bit with some U.S. dollar movement," said Darcy Browne, managing
director, capital markets trading, at CIBC. "The market's become
a little bit more sensitive to U.S. data."
    The Canadian dollar, whose performance was mixed
against other major currencies, finished at C$1.0177 versus the
greenback, or 98.26 U.S. cents. That was slightly weaker than
its Friday close of C$1.0169, or 98.34 U.S. cents.
    Browne said the currency was range-bound between C$1.0140
and the C$1.02.
    Global equity markets recouped some of last week's losses
overnight, with investors hoping the Fed will offer a more
cautious tone on reining in its stimulus measures when it
concludes its meeting on Wednesday.  
    Charles St-Arnaud, an economist and currency strategist at
Nomura Securities in New York, said the currency market is
expected to relatively quiet until the Fed makes a statement on
Wednesday.
    The Bank of Canada's new head, Stephen Poloz, will give his
first official speech on Wednesday, which is also likely to
garner scrutiny as the market tries to decipher his policy
stance.  
    Browne said it was still early days for Poloz, and does not
expect him to overshadow the Fed.
    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 were mixed, with the two-year bond
 flat, yielding 1.109 percent, and the benchmark
10-year bond down 24 Canadian cents to yield 2.148
percent.
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