* C$ at C$0.9925 vs US$, or $1.0074
* Fed comments boost riskier assets
* Bond prices mostly higher
By Jon Cook
TORONTO, March 27 The Canadian dollar was little
changed against its U.S. counterpart on Tuesday following a
strong rally in the previous session on comments by the U.S.
Federal Reserve that were viewed as dovish and helped to weaken
The U.S. dollar fell to its lowest level since March 2 as
Fed Chairman Ben Bernanke said on Monday the policy of very low
interest rates was needed to reduce unemployment, making it
clear he was in no rush to reverse course.
"The Fed is still remaining accommodative, and risk assets
are generally toward the positive side," said Mazen Issa, macro
strategist at TD Securities.
Global stocks hit a 2012 high on Tuesday and commodities
extended Monday's gains, with oil and base metals prices rising.
A weaker dollar makes commodities priced in the U.S. unit
cheaper for holders of other currencies.
At 8:20 a.m. (1320 GMT), the Canadian dollar was at
C$0.9925 versus the U.S. dollar, or $1.0074, down slightly from
Monday's North American close at C$0.9912 versus the greenback,
Canada's resource-heavy currency was supported by Brent
crude oil's rise above $125 a barrel, helped by Bernanke's
remarks and supply concerns amid tightening Western sanctions on
Copper held near its five-month high on Tuesday and gold
rose to a two-week high as the Fed's signal that it would keep
interest rates near rock-bottom levels reassured buyers that the
opportunity cost of holding bullion would stay low.
Analysts said the dollar could suffer further in the short
term if speculation about the prospect of further mass bond
buying, or quantitative easing (QE), persists. However, if U.S.
data continues to point to an economic recovery the currency
could start to push higher again.
"(Bernanke) is flagging the issue that the labor market
remains far from being improved and that would be a key issue to
doing more QE, which right now is looking quite remote," said
He added that the Bank of Canada is unlikely to hike its key
lending rate anytime soon, but said if the U.S. economy
strengthens over the next couple months, then there would be a
higher probability of an increase by end of the year.
Europe's debt crisis continues to linger, however, and
concerns of slowing Chinese growth were heightened after recent
manufacturing data showed a contraction.
Concerns about global growth pushed Canadian bond prices
higher across the curve. Canada's two-year bond rose
3 Canadian cents to yield 1.236 percent. The 10-year bond
was up 18 Canadian cents to yield 2.168 percent.