* C$ at $1.0006 vs US$, or 99.94 U.S. cents
* White House meeting set to discuss "fiscal cliff"
* Foreigners increased purchase of Canadian securities in
By Solarina Ho
TORONTO, Nov 16 The Canadian dollar strengthened
to near parity with the U.S. dollar on Friday ahead of a meeting
between U.S. President Barack Obama and congressional leaders to
discuss the U.S. fiscal crisis.
Market sentiment was slightly more hopeful that the United
States would be able to defuse the "fiscal cliff" crisis
following a Wall Street Journal report that said White House
officials were in advanced internal discussions that could
indicate increased flexibility on reaching a deal with
Equity markets have been mired in negative territory for
much of the last two weeks with investors worried that if no
deal is reached on the large, automatic budget cuts and tax
hikes set to begin next year, the U.S. economy could slip into
"There's very little in the way of macro risks, particularly
locally in Canada ... that leaves us watching the Obama meeting
on the fiscal cliff later on today," said Adam Cole, global head
of FX strategy at Royal Bank of Canada in London.
Cole said any suggestion that the negotiating parties were
having difficulty reaching a compromise would be negative for
risk appetite and bullish for the U.S. dollar.
At 9:24 a.m. (1424 GMT), the Canadian currency
traded at C$1.0006 to the U.S. dollar, or 99.94 U.S. cents,
slightly firmer than its North American close on Thursday of
C$1.0013, or 99.87 U.S. cents.
Canada's dollar was outperforming most major currencies, and
touched a near two-week high against the Australian dollar.
Given a dearth of news on Friday, Cole said the Canadian
dollar would likely be bound by the week's trading range of
C$0.9985 to C$1.0040.
Data on Friday showed that foreigners increased their
purchases of Canadian securities in September to C$13.92 billion
from C$7.56 billion in the previous month.
"Reasonably encouraging on the face of it. But typically
they're numbers the markets don't particularly trade off short
term, because obviously they're not very timely," said Cole,
noting the September figures do not shed light on what investors
are doing now.
Prices for Canadian government debt were mixed, with the
two-year bond shedding half a Canadian cent to yield
1.078 percent, and the benchmark 10-year bond
gaining 8 Canadian cents to yield 1.713 percent.