CANADA FX DEBT-C$ hemmed in by strength in the greenback

Wed Aug 20, 2014 9:29am EDT

* Canadian dollar at C$1.0942 or 91.39 U.S. cents
    * Bond prices mostly lower across the maturity curve

    By Leah Schnurr
    TORONTO, Aug 20 (Reuters) - The Canadian dollar was little
changed against the greenback on Wednesday, hampered by broad
strength for the U.S. dollar and as investors were looking ahead
to domestic inflation data at the end of the week.
    The loonie saw little reaction to a report that showed
Canadian wholesale trade rose more than expected in June and the
volume of sales grew as well. 
    Without any more domestic catalysts on tap until Friday, the
Canadian dollar was left consolidating around the mid-C$1.09
area after a sharp drop in the previous session.
    Despite some day-to-day swings, the loonie has largely
traded within a range since the end of July. Analysts expect the
currency to see further weakness before long as optimism over
the U.S. economic recovery should prompt investors to continue
to favor the greenback.
    "It looks like the long awaited rebound in the U.S. dollar
is underway and that's probably going to be the biggest factor
behind weakness in the Canadian dollar," said Mark Chandler,
head of Canadian fixed income and currency strategy at Royal
Bank of Canada in Toronto.
    The Canadian dollar was at C$1.0942 to the
greenback, or 91.39 U.S. cents, nearly flat to Tuesday's close
of C$1.0943, or 91.38 U.S. cents.
    Markets will be watching later in the day for the release of
the minutes from the U.S. Federal Reserve's most recent policy
meeting. Focus is also on the meeting of policymakers and
economists in Jackson Hole, Wyoming, at the end of the week,
with Fed Chair Janet Yellen due to give a speech on Friday. 
    At home, investors will get a look at Canadian inflation and
retail sales reports on Friday, which are seen as the biggest
potential domestic market movers of the week.
    Canadian government bond prices were mostly lower across the
maturity curve, with the two-year off half a Canadian
cent to yield 1.076 percent, though the benchmark 10-year
 was up 2 Canadian cents to yield 2.074 percent.

 (Editing by James Dalgleish)
FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.