CANADA FX DEBT-C$ rebounds from recent weakness; data in focus

Thu Aug 21, 2014 9:37am EDT

* Canadian dollar at C$1.0952, or 91.31 U.S. cents
    * Bond prices mostly lower across the maturity curve

    By Leah Schnurr
    TORONTO, Aug 21 (Reuters) - The Canadian dollar firmed
against the greenback on Thursday, rebounding after a nearly 1
percent drop over the last two days, ahead of some key domestic
economic data due at the end of the week.
    Concerns about the prospects for global growth hit the
loonie overnight after data showed business growth in China and
Europe slowed in August. The worries took the Canadian dollar to
a nearly two-week low in earlier trading before it was able to
claw back some gains. 
    Investors were turning their attention toward Canadian
inflation and retail sales reports that will be released on
Friday. With a quiet economic calendar at home, the reports will
be the main domestic events of the week.
    Although the loonie has made some sizeable intraday moves in
recent weeks, it has largely stayed within a trading range.
Analysts expect the ongoing favor for the U.S. dollar as the
economy south of the border picks up to continue to weigh on the
loonie, which could test the C$1.10 resistance level before
long.
    "The overall theme for the Canadian dollar this morning is a
bit of a breather from yesterday's selloff," said Scott Smith,
senior market analyst at Cambridge Mercantile Group in Calgary.
    "The U.S. dollar has rallied pretty strongly over the last
three to four sessions, so I think we're seeing a bit of a
breather and a little bit of position-squaring ahead of a big
risk day tomorrow."
    The Canadian dollar was at C$1.0952 to the
greenback, or 91.31 U.S. cents, stronger than Wednesday's close
of C$1.0971, or 91.15 U.S. cents.
    Investors were also focused on the start of the annual
gathering of economists and policymakers in Jackson Hole,
Wyoming, later on Thursday. Federal Reserve Chair Janet Yellen
is scheduled to speak on Friday.
    Canadian government bond prices were mostly lower across the
maturity curve, though the two-year was unchanged to
yield 1.092 percent. The benchmark 10-year was down
6 Canadian cents to yield 2.107 percent.
FILED UNDER:
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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