CANADA FX DEBT-C$ little changed, awaiting financial risk report

Thu Jun 12, 2014 10:12am EDT

* Canadian dollar at C$1.0857 or 92.11 U.S. cents
    * Eyes on Bank of Canada risk report, Poloz news conference
    * Bond prices rise across the maturity curve

    By Andrea Hopkins
    TORONTO, June 12 (Reuters) - The Canadian dollar was flat
and trading in a tight range against the U.S. dollar in early
trade on Thursday as investors awaited a Bank of Canada report
on Canada's financial stability that will focus on Canada
housing and consumer debt.
    The Bank of Canada will publish its Financial System Review 
at 10:30 a.m. (1430 GMT), rating how it sees various risks -
from domestic debt to international factors - to Canada's
financial system, and Governor Stephen Poloz will hold a press
conference after the report is released.
    In December, the central bank downgraded the overall risk to
elevated from high, saying the risk from high household debt and
the housing market remained elevated and constituted the biggest
domestic risk to financial stability.
    "It is new to have a press conference on this publication,
and so I think there is some market anticipation of how
(Poloz)plans to proceed," said Camilla Sutton, chief currency
strategist at Scotiabank.  
    "We're likely to see that household debt and housing issue
come up, as well as the impact of low global interest rates and
any other international factors that could be providing some
financial stability risk in Canada," she added.
    At 9:54 a.m. (1354 GMT) the Canadian dollar was at
C$1.0857 versus the greenback, of 92.11 U.S. cents, slightly
stronger than Wednesday's close at C$1.0867 versus the
greenback, or 92.02 U.S. cents. 
    In setting interest rates, the central bank has had to weigh
the debt and housing risks against low inflation. In a sign the
central bank is giving more importance to this assessment of
risks, Poloz and Senior Deputy Governor Carolyn Wilkins will
further elaborate on the report in a news conference.
    Canadian government bond prices were marginally higher
across the maturity curve, with the two-year up 0.3
Canadian cent to yield 1.078 percent and the benchmark 10-year
 rising 6 Canadian cents to yield 2.341 percent.

 (Reporting by Andrea Hopkins; Editing by Tom Brown)
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