CANADA FX DEBT-C$ rises but expected to stay range-bound

Tue Mar 25, 2014 4:49pm EDT

* Canadian dollar at C$1.1159 or 89.61 U.S. cents
    * Bond prices mostly lower across the maturity curve

 (Adds details, quote, updates prices)
    By Leah Schnurr
    TORONTO, March 25 (Reuters) - The Canadian dollar firmed
modestly against the greenback on Tuesday, though analysts
expect a dearth of domestic economic data this week will keep
the currency trading in a narrow band.  
    Geopolitical tensions continued to simmer as U.S. President
Barack Obama and his allies agreed to hold off on more damaging
economic sanctions against Russia unless Moscow goes beyond the
seizure of Crimea. Global markets appeared to take the situation
in stride. 
    Investors also continued to digest declines in the loonie
last week that were spurred by more dovish-than-expected
comments from Bank of Canada Governor Stephen Poloz and remarks
from U.S. Federal Reserve Chair Janet Yellen about a potentially
faster timetable for raising interest rates. The Canadian dollar
hit a 4-1/2-year low late last week.
    The loonie has been able to regain some ground since then
and investors expect it to consolidate in the short term.
    "Technically, this could simply be a correction of that
move," said Gareth Sylvester, director at Klarity FX in San
Francisco.
    "We certainly retain the opinion that from a multi-month
perspective, U.S. dollar-Canadian dollar should have an assault
up toward that C$1.1450 to C$1.15 area. I think as long as we
remain above C$1.1020 over the next few weeks, we would
certainly favor that move."
    The Canadian dollar ended the North American
session at C$1.1159 to the greenback, or 89.61 U.S. cents,
stronger than Monday's close of C$1.1195, or 89.33 U.S. cents.
    Technicals still suggest further Canadian dollar weakness,
said Camilla Sutton, chief currency strategist at Scotiabank in
Toronto.
    Without any major Canadian data on tap until next Monday,
when monthly gross domestic product will be released, investors
were watching economic data out of the United States.
    Figures on Tuesday showed U.S. home prices rose in January,
while consumer confidence climbed to a six-year high this month.
 
    Canadian government bond prices were mostly lower across the
maturity curve, though the two-year was up 1 Canadian
cent to yield 1.069 percent. The benchmark 10-year 
was down 20 Canadian cents to yield 2.481 percent.

 (Editing by Diane Craft)
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