CANADA FX DEBT-C$ hovers near 1-month high after China data

Thu May 8, 2014 9:50am EDT

* Canadian dollar at C$1.0872 or 91.98 U.S. cents
    * Bond prices mostly higher across the maturity curve

    By Leah Schnurr
    TORONTO, May 8 (Reuters) - The Canadian dollar firmed
against the greenback on Thursday, hovering near a one-month
high after data showed exports in China picked up, easing some
concerns over the strength of the world's second-largest
economy.
    The loonie also got some support from domestic data that
showed housing starts rebounded in April. 
    The currency rose to its highest level in almost a month in
early morning trading as investors were cheered by data that
showed China's exports and imports returned to growth in April.
 
    The Canadian dollar is often sensitive to economic news out
of China, a major consumer of natural resources. China had seen
a weaker-than-expected start to 2014, which prompted nervousness
over the prospects for global growth.
    "Those better numbers helped put some optimism out there
that there might be a floor under the weakness we saw in the
growth numbers for the first quarter in the Chinese economy and
we could see a rebound in the second quarter," said Scott Smith,
senior market analyst at Cambridge Mercantile Group in Calgary.
    "That helped out commodity-correlated currencies overnight,
so the Canadian dollar got a bit of a bid."
    The Canadian dollar was at C$1.0872 to the
greenback, or 91.98 U.S. cents, stronger than Wednesday's close
of C$1.0894, or 91.79 U.S. cents. The loonie touched a session
high of C$1.0868.
    After earlier pushing higher, the euro fell against the
Canadian dollar as investors were watching a press
conference by European Central Bank President Mario Draghi. 
    The euro was at C$1.5101 after Draghi said the central bank
may consider fresh monetary policy measures at its June meeting
after updated economic forecasts are published by the bank's
staff. 
    The euro had initially got a lift against the Canadian
dollar after the ECB left interest rates
unchanged. 
    Canadian government bond prices were mostly higher across
the maturity curve, though the two-year was unchanged
to yield 1.075 percent, while the benchmark 10-year 
rose 18 Canadian cents to yield 2.360 percent.

 (Editing by Nick Zieminski)
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