CANADA FX DEBT-C$ stays rangebound to close out the week

Fri Apr 25, 2014 9:38am EDT

* Canadian dollar at C$1.1023 or 90.72 U.S. cents
    * Bond prices higher across the maturity curve

    By Leah Schnurr
    TORONTO, April 25 (Reuters) - The Canadian dollar was little
changed against the greenback on Friday, sticking to its recent
trading range as investors found few catalysts to push the
currency decisively in either direction.
    Concerns over heightened tensions in Ukraine kept markets
cautious. Russia warned Kiev it would face justice for a "bloody
crime" in eastern Ukraine, where Ukrainian forces killed up to
five pro-Russian rebels a day earlier. 
    The focus on geopolitical risk in the region has seen risk
aversion ebb and flow in recent months.
    Analysts said a speech from the head of the Bank of Canada
late on Thursday afternoon yielded few surprises. Governor
Stephen Poloz reiterated the central bank's neutral stance and
that an interest rate cut is just as possible as a rate hike.
Poloz also said he was more hopeful than before about an export
recovery. 
    "It really seems like the Bank of Canada wants to stay as
neutral for as long as possible - of course, more on the dovish
side of that neutral bias," said Bipan Rai, director of foreign
exchange strategy at CIBC World Markets in Toronto.
    "I think they're going to try to do that for as long as they
can, at least until markets start considering Fed (rate) hikes
again."
    The Canadian dollar was at C$1.1023 to the
greenback, or 90.72 U.S. cents, slightly stronger than
Thursday's close of C$1.1028, or 90.68 U.S. cents. 
    The Canadian dollar's rally from March's 4-1/2-year low has
run out of momentum the last two weeks. The currency has traded
sideways in recent sessions as it hovers around the technically
important C$1.10 level.
    Next week will bring potentially market-moving factors,
including Canadian monthly gross domestic product figures.
Investors will also get a slew of data from south of the border,
including the April unemployment report and a policy-setting
meeting from the Federal Reserve.
    "Really, what we're looking for to shake U.S.
dollar-Canadian dollar out of this consolidative phase is
stronger U.S. data, which should potentially lead to an increase
in volatility in the front-end of the treasury curve and drive
bids for the (U.S.) dollar higher," said Rai.
    Canadian government bond prices were higher across the
maturity curve, with the two-year up 1-1/2 Canadian
cents to yield 1.060 percent and the benchmark 10-year
 up 20 Canadian cents to yield 2.402 percent.

 (Editing by Meredith Mazzilli)
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