CANADA FX DEBT-C$ weaker as greenback boosted by retail data

Thu Dec 12, 2013 9:54am EST

* Canadian dollar at C$1.0612 vs US$, or 94.23 U.S. cents
    * U.S. data helps greenback
    * Canada also hurt by blowback from RBA comments
    * Bond prices mixed across the maturity curve

    By Alastair Sharp
    TORONTO, Dec 12 (Reuters) - The Canadian dollar weakened on
Thursday after strong U.S. retail sales data boosted the
greenback, and as its commodity-linked cousin the Australian
dollar plunged on comments about the need for a weaker currency
from its central bank head. 
    Americans bought more automobiles and other goods in
November, adding to signs of a strengthening economy that could
draw the Federal Reserve closer to reducing the pace of monetary
stimulus, though the outlook was clouded somewhat by a big jump
in first-time applications for unemployment benefits last week.
 
    "Retail sales was very good, with revisions, the employment
data was worse than expected. I think the retail sales is
winning out today," said John Curran, senior vice president at
CanadianForex.
    "It is definitely not hurting U.S. dollar/Canada that the
Aussie just took a big kick in the face," he said.
    The Australian dollar lost a cent against the greenback
 to 89.35 U.S. cents, and was softer against the Canadian
 currency as well, after Reserve Bank of Australia
Governor Glenn Stevens said in an interview with the Australian
Financial Review that the currency should be trading closer to
85 U.S. cents. 
    "If the Aussie starts to roll it will have some fallout on
the Canadian dollar as well," Curran said.
    The Canadian dollar was at C$1.0612 to the
greenback, or 94.23 U.S. cents, compared to Wednesday's North
American close of C$1.0593, or 94.40 U.S. cents.
    Curran said that if the loonie, as Canada's currency is
colloquially known, pushes above $1.0620 it will likely keep
weakening and could test recent highs around $1.07 in coming
sessions.
    Canadian government bond prices were mixed across the
maturity curve, with the two-year down half a
Canadian cent to yield 1.102 percent and the benchmark 10-year
 was down 4 Canadian cents to yield 2.653 percent.
The 20- and 30-year issues were pricing higher, as were 3- and
4-year issues.
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