* C$ at C$1.0301 vs US$ or 97.08 U.S. cents
* U.S. dollar hit by withdrawal of Summers for Fed
* Canadian bond prices rise across maturities
By Leah Schnurr
TORONTO, Sept 16 The Canadian dollar
strengthened on Monday to its highest in a month as its U.S.
counterpart weakened against a range of currencies after former
Treasury Secretary Lawrence Summers withdrew from the race to
head up the U.S. central bank.
The announcement over the weekend took the U.S. dollar
broadly lower as investors perceived there would be a more
gradual path for tightening monetary policy.
"Having Summers now withdraw his candidacy and having the
risk of a more dovish Fed chair has certainly impacted markets
this morning," said Camilla Sutton, chief currency strategist at
As well as the question of who will succeed current Federal
Reserve Chairman Ben Bernanke, investors are also focused on
when the Fed will start pulling back its economic stimulus
The central bank will conclude a two-day policy meeting on
Wednesday, and investors expect the Fed could announce it will
reduce its $85 billion a month in bond purchases by $10 billion.
The Canadian dollar was at C$1.0301 to the U.S.
dollar, or 97.08 U.S. cents, stronger than Friday's session
close at C$1.0347, or 96.65 U.S. cents. The Canadian dollar
earlier hit its strongest level since mid-August.
The greenback was 0.5 percent lower against a basket of
At home, the Canadian dollar saw little reaction to data
that showed foreigners resumed buying Canadian securities after
a huge divestment in June.
Data released last week that showed the ratio of household
debt to income in Canada hit a record high in the second quarter
could be a long-term positive for the loonie if it prompts a
change in the Bank of Canada's policy stance, said Sutton.
"This reopens the risk that the Bank of Canada turns to a
more hawkish stance," Sutton said.
The ratio of household debt to income rose to 163.4 percent
in the second quarter from 162.1 percent in the first quarter.
Prices for Canadian government bonds were higher across the
maturity curve, with the two-year bond up seven and a
half Canadian cents to yield 1.242 percent and the benchmark
10-year bond rising 54 Canadian cents to yield 2.699