CANADA FX DEBT-C$ flat as Fed officials temper stimulus worries

Thu Jun 27, 2013 5:27pm EDT

* C$ at C$1.0475 vs US$, or 95.47 U.S. cents
    * Fed officials say markets overreacted to Bernanke comments
    * Markets still focused on timing of stimulus reduction
    * Bond prices rise across curve

    By Solarina Ho
    TORONTO, June 27 (Reuters) - The Canadian dollar was steady
against its U.S. counterpart on Thursday after being pushed and
pulled during the session by moves in commodity prices and by
comments by U.S. Federal Reserve officials suggesting markets
reacted too aggressively following comments by Fed Chairman Ben
Bernanke last week.
    William Dudley, the influential head of the New York Fed,
said the Fed's stimulative asset purchases could be more
aggressive than Bernanke outlined if economic growth and the
labor market turn out weaker than expected. 
    Fed Board Governor Jerome Powell said markets overreacted to
Bernanke's statements and brought expectations for the Fed's
first rate hike too far forward. 
     The U.S. dollar had risen forcefully since last week, when
Bernanke discussed a potential slowing of the pace of its
stimulative asset purchases as the economy improves.
     "There's a lot more going on with some of the other
currencies than USD/CAD, so it's kind of to-ing and for-ing with
movements in euro and euro crosses," said David Bradley,
director of foreign exchange trading at Scotiabank. "It's just
reacting to everything else that's going on around the world."
    The Canadian dollar finished the North American
session at C$1.0475 versus the U.S. dollar, or 95.47 U.S. cents,
little changed from Wednesday's finish of C$1.0479, or 95.43
U.S. cents. It traded as firm as C$1.0423 and as weak as
C$1.0505.
    U.S. jobless data on Thursday reinforced expectations that
the world's largest economy continues to strengthen and that the
Fed will eventually rein in its stimulus spending.
    The Canadian dollar and other commodity-related currencies
were finding some support from oil prices, which rose as markets
reassured themselves the Fed would not be rushing to scale back
its massive bond-buying program. 
    Canadian economic growth data for April was set to be
released on Friday, with economists polled by Reuters expecting
a negligible 0.1 percent rise in gross domestic product.
 
    The two-year bond was up 4.5 Canadian cents to
yield 1.202 percent, while the benchmark 10-year bond
 rose 71 Canadian cents to yield 2.412 percent.
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