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CANADA FX DEBT-C$ flat with fears over oil, Europe in focus
February 24, 2012 / 1:25 PM / 6 years ago

CANADA FX DEBT-C$ flat with fears over oil, Europe in focus

* C$ flat at C$0.9981 vs US$, or $1.0019

* Bonds prices creep higher

By Claire Sibonney

TORONTO, Feb 24 (Reuters) - The Canadian dollar was little changed against the U.S. dollar on Friday as recent optimism spurred by positive global economic data was offset by unease about high oil prices and the implementation of Greece’s rescue deal.

A day after hitting a record high in euro terms, Brent crude jumped above $124, raising worries a run of sharp price gains could stymie the euro zone’s growth prospects, making it harder for governments to meet budget targets and pull the currency bloc out of its debt crisis.

“At the end of the day the Canadian dollar is really an afterthought in foreign exchange markets being pulled in both directions,” said Michael O‘Neill, vice-president of foreign exchange trading at RJOFX Canada.

“All the benefits of improving U.S. economic data and rising oil prices are offset by selling of Canada against the crosses,” he added, noting profit-taking in the Canada/yen and euro/Canada pairs.

The euro extended a surge to 10-week highs against the U.S. dollar in the wake of better-than-expected German data on Thursday which led investors to close some bets on losses for the single currency.

At 7:54 a.m. (1254 GMT), the Canadian dollar stood at C$0.9981 to the U.S. dollar, or $1.0019, off slightly from Thursday’s North American session close at C$0.9976 against its U.S. counterpart, or $1.0024.

O‘Neill put Friday’s range between C$0.9940-C$1.0010, hovering either side of parity.

Encouraging U.S. jobs data on Thursday also helped fuel the rally in risk assets, taking Wall Street near peaks not seen since before the 2008 collapse of Lehman Brothers.

Investors will look to a Thomson Reuters/University of Michigan Surveys of Consumers at 9:55 a.m. (1455 GMT) for further direction.

Markets were also gearing up for a second three-year financing operation by the European Central Bank next week, which is expected to provide nearly half a trillion euros of cheap cash and ease concerns about bank funding.

The euro zone’s debt problems are also likely to dominate a two-day meeting of G20 finance ministers on the weekend with euro zone countries pushing for their G20 partners to commit more money to the IMF to help the currency bloc overcome its crisis.

Canadian bond prices crept higher across the curve.

The two-year bond was up 1 Canadian cent to yield 1.084 percent. The 10-year bond climbed 20 Canadian cents to yield 2.030 percent.

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