* C$ at C$0.9926 to US$, or $1.0074
* Currency splits from rising equities, commodity prices
* Bank of Canada expects to lower growth forecast this week
By Alastair Sharp
TORONTO, Jan 21 The Canadian dollar weakened
slightly against its U.S. counterpart on Monday, bucking a
recent trend in which investors buy the currency when equity
markets and commodity prices rise.
U.S. stock markets ended last week at 5-year highs as early
earnings impressed, while gold and oil held on to recent gains.
Toronto's stock market also looked set to open
higher as signs pointed to U.S. lawmakers making progress
towards a deal to raise the country's debt limit.
"All in all, with all the drivers pointing to Canadian
dollar strength, it doesn't totally follow that the currency has
weakened," said Camilla Sutton, chief currency strategist at
At 8:41.m. (1341 GMT) the Canadian dollar was
trading at C$0.9926 to the greenback, or $1.0074, compared with
C$0.9918, or $1.0083, at Friday's North American close.
The Canadian currency retreated 0.7 percent last week to
near a three-week low as investors knocked it out of a recent
tight range with a push past a technical support level.
Sutton suggested the Canadian dollar could have fallen
victim to a staunch of official flows, pointing to the Swiss
central bank not needing to buy other currencies so forcefully
as one example.
The Canadian dollar was also weak against other major
currencies, including the euro, the Swiss franc
and the Japanese yen.
Prices for both the two-year and benchmark
10-year bonds were unchanged, yielding 1.181 percent
and 1.920 percent respectively.
The session was likely to be subdued by a U.S. holiday,
while investors are also eyeing a Bank of Japan policy-setting
meeting overnight in which the bank is expected to ease monetary
The Bank of Canada is expected to hold rates steady when it
announces its rate policy on Wednesday, together with the
publication of its Monetary Policy Report. Analysts are
expecting the central bank to lower its growth forecast as
Canada's economy struggles to register more than limp growth.
Canada's wholesale trade increased by 0.7 percent in
November from October, largely due to higher sales of computer
and communications equipment and supplies, data released on
Other domestic data on tap this week include retail sales
numbers due out on Tuesday and December consumer price index
data on Friday.