CANADA FX DEBT-C$ weakens; retail sales, policymakers in focus

Tue Nov 19, 2013 4:29pm EST

* Canadian dollar at C$1.0471 vs U.S. dollar, or 95.50 U.S.
cents
    * Bond prices lower across the maturity curve


    By Leah Schnurr
    TORONTO, Nov 19 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Tuesday as investors positioned
themselves ahead of retail sales data due this week from both
the United States and Canada.
    With investors also awaiting commentary from central bank
policymakers on both sides of the border, the loonie drifted
away from the one-week high it hit on Monday.
    "Canada is lacking some momentum or a boost here, so it's
come off those recent highs," said Don Mikolich, executive
director of foreign exchange sales at CIBC World Markets in
Toronto.
    Federal Reserve Chairman Ben Bernanke was due to speak later
on Tuesday, while Bank of Canada Governor Stephen Poloz will be
giving parliamentary testimony on Wednesday, along with Senior
Deputy Governor Tiff Macklem. 
    On the economic front, U.S. retail sales data for October
are also due on Wednesday and are expected to show a 0.1 percent
rise, according to economists polled by Reuters. Canadian retail
sales for September, expected on Friday, is forecast to show a
0.3 percent rise. 
    "What you're seeing is a little bit of repositioning ...
with everyone looking at growth, retail sales would be the
interesting (economic point), but even then, it's going to be
U.S. retail sales that will grab the headline," said Brad
Schruder, director of foreign exchange at BMO Capital Markets.
    Inflation data on both sides of the border are also released
this week, but Schruder said inflation, which has seen little
movement, has "almost become a tertiary figure."
    The Canadian dollar ended the North American
session at C$1.0471 versus the greenback, or 95.50 U.S. cents,
weaker than Monday's close at C$1.0432, or 95.86 U.S. cents.
    The loonie should see support around C$1.0410, but unless
there are some positive catalysts from both Canada and the
United States, the currency is likely where it should be for
now, said Mikolich.
    Canadian bond yields were lower across the maturity curve,
with the two-year bond down 4 Canadian cents to yield
1.125 percent, while the benchmark 10-year bond fell
33 Canadian cents to yield 2.568 percent.
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