CANADA FX DEBT-C$ steady, supported by risk appetite

Wed Mar 26, 2014 9:55am EDT

* Canadian dollar at C$1.1167 or 89.55 U.S. cents
    * Bond prices mostly higher across the maturity curve

    By Leah Schnurr
    TORONTO, March 26 (Reuters) - The Canadian dollar was little
changed against the greenback on Wednesday as a lack of domestic
economic data left the currency without much direction, though
an overall improvement in market risk appetite gave the loonie
some support.
    Worries over geopolitical tensions eased as U.S. President
Barack Obama and leaders of the Group of Seven major
industrialized nations agreed this week to hold off on tougher
economic sanctions against Russia unless President Vladimir
Putin takes further action to destabilize Ukraine or other
former Soviet republics. 
    The brightening of sentiment helped the loonie continue to
consolidate after it fell to a 4-1/2 year low last week.
    "From a broad perspective, it's a little bit of an uptick in
the loonie. It's really driven by a small gain in risk
appetite," said Rahim Madhavji, president at KnightsbridgeFX.com
in Toronto.
    With no major economic data on the calendar until next week,
analysts said the Canadian dollar is likely to be confined to a
tight range.
    "There's no catalyst for the loonie in the near term, so
we're still expecting to see a lack of momentum in the short
term and a lot of range-bound trading," Madhavji said.
    The Canadian dollar was at C$1.1167 to the
greenback, or 89.55 U.S. cents, slightly weaker than Tuesday's
close of C$1.1159, or 89.61 U.S. cents.
    The loonie had been stronger in overnight trade, but those
gains dwindled in morning action. It had risen alongside other
growth and commodity currencies, including the Australian
dollar, after Australia's top central banker played down the
risk of a sustained rise in domestic inflationary pressures.
 
    Reserve Bank of Australia Governor Glenn Stevens did not
make any mention in his speech of the Australian dollar being
too strong, but he later said he expects the currency to weaken.
 
    Canadian government bond prices were mostly higher across
the maturity curve, though the two-year was unchanged
to yield 1.069 percent. The benchmark 10-year was up
16 Canadian cents to yield 2.464 percent.

 (Editing by Peter Galloway)
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