* C$ flat at C$0.9865 vs US$, or $1.0137
* Bond prices little changed across curve
By Claire Sibonney
TORONTO, Jan 9 Canada's dollar was little
changed against its U.S. counterpart on Wednesday in rangebound
trading, shrugging off a modest rally in other riskier assets
after aluminum giant Alcoa opened the U.S. earnings
season with an optimistic outlook.
World shares staged a slight recovery after two days of
losses. However, even with the encouraging Alcoa report,
investors were wary about the outcome of the fourth-quarter
Adam Cole, global head of FX strategy at RBC Capital Markets
in London, said he expects the Canadian dollar to start reacting
to the U.S. earnings season once it picks up steam.
"It looks extremely dull," said Cole.
"Coming sessions is where we particularly take direction
from (earnings). If that's where stocks take their direction
then it's difficult to get away from that, being a fairly major
barometer of pressure on CAD."
U.S. profits were expected to beat the previous quarter's
lackluster results, but analyst estimates were down sharply from
October. Quarterly earnings were expected to grow by 2.7
percent, according to Thomson Reuters data.
Investors were also in a cautious mood before European and
British central banks hold policy meetings on Thursday, when
Spain also tests appetite for peripheral euro zone debt and
China releases trade data.
At 9:07 a.m. (1407 GMT), the Canadian dollar stood
at C$0.9865 versus the greenback, or $1.0137, slightly weaker
than Tuesday's North American session close at C$0.9867, or
$1.0135. It traded in a tight 21-point range between
RBC noted near-term U.S. dollar resistance versus the
Canadian dollar around C$0.9947 and support near C$0.9826.
Helping to limit the move on Wednesday, data showed Canadian
housing starts slowed in December, but not as sharply as
expected, as rural starts declined but urban starts held steady.
Still, the Canadian dollar was outperforming some other
major currencies such as the yen, as renewed expectations of
easier Bank of Japan monetary policy led some investors to sell
the Japanese currency.
Canadian bond prices were also little changed, climbing at
the short end of the curve, while longer-dated issues drifted
The two-year bond was up nearly 1 Canadian cent
to yield 1.161 percent, while the benchmark 10-year bond
was off 1 Canadian cent to yield 1.909 percent.