CANADA FX DEBT-C$ tumbles to 2-year low as breaks through key level
* C$ at C$1.0620 vs US$, or 94.16 U.S. cents * GDP 2.7 percent in 3rd quarter, vs forecast of 2.5 percent * Bond prices lower across the maturity curve By Leah Schnurr TORONTO, Nov 29 (Reuters) - The Canadian dollar tumbled against the greenback on Friday to its weakest level in over two years, breaking through a key resistance level and adding to recent bearish sentiment over the currency. The loonie has suffered of late against a backdrop of a less hawkish Bank of Canada, weaker oil prices and expectations that the U.S. Federal Reserve will start to wind down its economic stimulus. The loonie had strengthened early in the session on Friday after data showed the Canadian economy grew at its fastest pace in two years in the third quarter. But that prompted corporations to step in and buy U.S. dollars and sell off the Canadian currency, said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. "With the steady up-trend we've seen since September, any sort of dips in U.S. dollar-Canada dollar are being met with real money demand," said Smith. Lower liquidity the day after the U.S. Thanksgiving holiday also made it easier to push the loonie lower, said Smith. U.S. bond and equity markets closed early on Friday. The Canadian dollar ended the North American session at C$1.0620 to the greenback, or 94.16 U.S. cents, weaker than Thursday's close of C$1.0587 or 94.46 U.S. cents. The loonie traded as far as C$1.0629, its lowest level since early October 2011. The low previously hit this year in July at 1.0609 had represented significant resistance for the currency. "We've seen a very bearish sentiment in terms of the loonie over the last few weeks," said Smith. "To some extent that makes me feel like we could see a retracement over the next couple sessions or week, just because it seems like everyone and their dog is piling on the negative data to the loonie right now." A Goldman Sachs note earlier in the week suggested the Canadian dollar could fall to C$1.14 a year from now. Data early in the morning showed the Canadian economy grew at a faster pace than expected in the last quarter at 2.7 percent annualized, driven mainly by consumer spending and business inventory accumulation. While the reading beat market forecasts, it also came on the heels of a disappointing second quarter. Averaging the second and third quarter gives a growth rate of a little over 2 percent, "a fair reflection of the underlying growth trend in the economy," said Doug Porter, chief economist at BMO Capital Markets in Toronto. "The 2.7 is a bit of an outlier and I suspect it will come down to earth somewhat in the fourth quarter," he said. The two-year bond dipped 1-1/2 Canadian cents to yield 1.097 percent, while the benchmark 10-year bond was off 14 Canadian cents to yield 2.555 percent.
- Children's corpses reveal desperate attempts to escape Korean ferry |
- Ukraine's leaders say have U.S. backing to take on 'aggressors' |
- Obama reassures Japan, other allies on China as Asia trip begins |
- 'Bridgegate' scandal threatens next World Trade Center tower
- UPDATE 4-Children's corpses reveal desperate attempts to escape Korean ferry