CANADA FX DEBT-Softer C$ pares losses on weak U.S. durable goods

Mon Aug 26, 2013 9:43am EDT

* C$ at C$1.0508 vs US$, or 95.17 U.S. cents
    * U.S. durable goods records biggest drop in nearly a year
    * Fed speakers, Canada GDP this week
    * Bond prices rise across maturity curve

    By Solarina Ho
    TORONTO, Aug 26 (Reuters) - The Canadian dollar was softer
against the U.S. dollar in thin trading on Monday, but pared
losses after weaker-than-expected U.S. durable goods data.
    Orders for long-lasting U.S. manufactured goods such as
refrigerators and computers recorded their largest drop in
nearly a year last month and a gauge of planned business
spending on capital goods tumbled. 
    "A little bit of action obviously after the durable good
orders out of the U.S. - it was much weaker than expected," said
 Blake Jespersen, managing director, foreign exchange sales at
BMO Capital Markets.
    "We did see U.S. slide on that news, but we continue to
believe overall the U.S. dollar should be well supported in the
coming weeks. Therefore any opportunities to buy the U.S. dollar
on dips will be definitely taken advantage of."
    The data followed a slowdown in residential construction and
new home sales last week, which indicates an economy that may
not grow much from the second quarter.
    At 9:13 a.m. (1313 GMT), the Canadian dollar was
trading at C$1.0508 versus the greenback, or 95.17 U.S. cents.
This was weaker than Friday's finish at C$1.0501 to the U.S.
dollar, or 95.23 U.S cents.
    The Canadian dollar, which was mostly underperforming its
main currency counterparts, was expected to trade between
C$1.0480 and C$1.0530 to the U.S. dollar on Monday, said
Jespersen.
    Two Fed speakers and Canadian economic growth data could
drive currency direction during this final week of August,
typically one of the quieter weeks of the year, Jespersen said.
 
    The Fed has been the biggest news driver this summer and
investors are expected to parse over anything out of the U.S.
central bank amid expectations it will begin scaling back its
stimulus program sometime this fall.
    Canadian government bond prices were higher across the
maturity curve, with the two-year bond rising 1.5
Canadian cents to yield 1.184 percent. The benchmark 10-year
bond was up 20 Canadian cents, with a yield of 2.667
percent.
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