CANADA FX DEBT-C$ pulls back from one-month high as data weighs

Wed May 7, 2014 9:40am EDT

* Canadian dollar at C$1.0897 or 91.77 U.S. cents
    * Bond prices lower across the maturity curve

    By Leah Schnurr
    TORONTO, May 7 (Reuters) - The Canadian dollar weakened
modestly against the greenback on Wednesday, easing from the
previous session's nearly one-month high as data showed Canadian
building permits fell unexpectedly in March.
    Investors were also looking ahead to testimony from U.S.
Federal Reserve Chair Janet Yellen later in the morning, while
the main data focus of the week will be the Canadian April
employment report due on Friday.
    The Canadian dollar was taking a breather after Tuesday's
selloff of the U.S. dollar helped it push strongly higher and
out of its recent trading range. 
    The currency had been comfortable around either side of the
key C$1.10 level in recent weeks, but Tuesday's action pushed it
into the high C$1.08s.
    "We've more narrowly defined ourselves a bit lower right
now," said Don Mikolich, executive director of foreign exchange
sales at CIBC World Markets in Toronto.
    The U.S. dollar-Canadian dollar pairing could see support at
the C$1.0860 and C$1.0840 levels, Mikolich said, while the top
could be limited at C$1.0960. 
    The Canadian dollar was at C$1.0897 to the
greenback, or 91.77 U.S. cents, weaker than Tuesday's close of
C$1.0879, or 91.92 U.S. cents.
    The loonie lost steam after data showed the value of
building permits issued in Canada fell 3 percent in March,
though residential permits inched higher. 
    The report could temper expectations for housing starts data
due on Thursday, though it can often take two or three months
for the impact of building permits to be seen in the starts
figures, Mikolich said.
    Canadian government bond prices were lower across the
maturity curve, with the two-year off 1-1/2 Canadian
cents to yield 1.079 percent and the benchmark 10-year
 down 5 Canadian cents to yield 2.380 percent.

 (Editing by Peter Galloway)
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