CANADA FX DEBT-C$ softens slightly as China data weighs

Mon Mar 10, 2014 9:51am EDT

* Canadian dollar at C$C$1.1107  or 90.03 U.S. cents
    * Bond prices mixed across the maturity curve

    By Solarina Ho
    TORONTO, March 10 (Reuters) - The commodities-linked
Canadian dollar was slightly weaker against its U.S. counterpart
on Monday as Chinese exports unexpectedly sank in February,
spurring investor caution over the world's second-largest
economy.
    Chinese exports fell 18 percent from a year ago, swinging
the trade balance into deficit. The Lunar New Year holiday was
blamed for the sharp decline, though the data followed a series
of factory surveys this year that hint at softer demand in China
and abroad. 
    The Canadian dollar eased alongside its sister currency, the
Australian dollar, which is even more closely tied to the health
of the economy in China. 
    The move was marginal relative to Friday's retreat on the
disappointing Canadian jobs data. 
    "It's still relatively small movements," said Mark Chandler,
head of Canadian fixed income and currency strategy at Royal
Bank of Canada, noting the dearth of domestic data.
    "It's basically just a slightly negative risk tone that's
driving the currency and making it a bit weaker here."
    At 9:30 a.m. (1330 GMT), the Canadian dollar was at
C$1.1107 to the greenback, or 90.03 U.S. cents, weaker than
Friday's close of C$1.1090, or 90.17 U.S. cents.
    The Canadian dollar was underperforming most other key
currencies, except for the Australian dollar and the
British pound.
    Royal Bank forecast a trading range between C$1.1090 and
C$1.1140 on Monday.
    The only domestic data in Canada was housing starts, which
rose more than expected in February, but did little to impact
expectations that Canadian housing market will cool in 2014.
 
    Canadian government bond prices were mixed across the
maturity curve, with the two-year up a marginal 0.2
Canadian cent to yield 1.051 percent and the benchmark 10-year
 unchanged with a yield of 2.522 percent.
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