CANADA FX DEBT-C$ strengthens slightly from 21-month low

Mon Jul 8, 2013 5:05pm EDT

* C$ ends at C$1.0560 vs US$, or 94.70 U.S. cents
    * Strengthens slightly after Friday's 21-month low
    * Bond prices higher


    By Cameron French
    TORONTO, July 8 (Reuters) - The Canadian dollar ended
slightly higher against its U.S. counterpart on Monday, rising
from a 21-month low last week as U.S. dollar investors trimmed
their positions after a strong run since mid-June.
    However, a Bank of Canada survey, released on Monday,
showing businesses remain wary of Canada's sluggish economy
didn't alter the perception that the Canadian dollar will
continue to lose ground, particularly as the U.S. Federal
Reserve signals its intention to scale back stimulus measures.
 
    The currency ended at C$1.0560 to the U.S. dollar,
or 94.70 U.S. cents, slightly stronger than Friday's North
American session close of C$1.0567, or 94.63 U.S. cents.
    The Canadian dollar has been on a fairly steady decline
since mid-June and hit its lowest level in 21 months on Friday
after strong U.S. jobs data bolstered the greenback.
    "We're looking a little bit overextended after the (U.S.
dollar) move up we've seen...so I wouldn't be at all surprised
to see a little bit of consolidation," said Shaun Osborne, chief
currency strategist at TD Securities.
    Osborne said the Canadian currency could stage a mild
rebound against the U.S. dollar in the short term, but that its
longer-term direction is lower.
    The U.S. dollar was generally weaker against major
currencies on Monday. 
    Prices for Canadian government debt were higher across the
curve. The two-year bond was up 13 Canadian cents to
yield 1.165 percent. The benchmark 10-year bond was
up 61 Canadian cents to yield 2.479 percent.
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