CANADA FX DEBT-C$ stays range-bound as securities data shows outflow

Fri May 16, 2014 9:42am EDT

* Canadian dollar at C$1.0882 or 91.89 U.S. cents
    * Bond prices lower across the maturity curve

    By Leah Schnurr
    TORONTO, May 16 (Reuters) - The Canadian dollar was little
changed against the greenback on Friday, sticking to its recent
trading range after data showed foreign investors sold Canadian
securities in March.
    After some sharp gains in the last two weeks, the loonie has
consolidated this week as it has found few catalysts to push it
decisively in either direction.
    The loonie touched a four-month high last week, trading in
the low C$1.08s, but snapped back after a disappointing domestic
jobs report last Friday. Analysts expect the currency will be
comfortable around either side of the C$1.10 level in the
near-term.
    "The loonie is just keeping calm and carrying on," said
Scott Smith, senior market analyst at Cambridge Mercantile Group
in Calgary.
    "This week was really characterized by just taking stock of
what has happened the previous two weeks and looking on a
go-forward basis at how traders want to position in U.S.
dollar-Canadian dollar."
    The Canadian dollar was at C$1.0882 to the
greenback, or 91.89 U.S. cents, slightly weaker than Thursday's
close of C$1.0877, or 91.94 U.S. cents.
    The currency will likely trade between C$1.0920 and C$1.0860
for the session, said Smith.
    Data showed foreign investors sold C$1.23 billion ($1.13
billion) worth of Canadian securities in March, the first
divestment this year, while domestic purchases of overseas
assets hit a 16-month high. 
    Canadian government bond yields picked up slightly, lifting
the benchmark 10-year off the trough hit on Thursday
that brought it to its lowest level since last June.
    Canadian bonds had moved alongside a rally in U.S.
Treasuries on Thursday. While the sudden move did not have much
impact on foreign exchange markets, analysts said it will likely
remain on the radar screen heading into next week.
    The Canadian 10-year was down 8 Canadian cents to yield
2.264 percent, while the two-year was off 0.3
Canadian cents to yield 1.039 percent.

 (Editing by W Simon)
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