Forex Market News - Canada dollar flags as Bernanke boosts greenback
Tue Jun 3, 2008 5:22pm EDT
* Canadian dollar weakens against rallying U.S. dollar
* Its decline reaches 1.5 percent over two sessions
* Bonds rebound on U.S. avian bird flu scare
By Frank Pingue
TORONTO, June 3 (Reuters) - The Canadian dollar fell nearly
1 percent on Tuesday against a U.S. dollar that rallied after
comments from the head of the Federal Reserve that bolstered
the view that the Fed may raise U.S. interest rates this year.
Domestic bond prices rebounded from losses suffered early
in the session and closed mostly higher across the curve as
bird flu news out of the United States and financial jitters
sparked demand for more secure assets.
The Canadian dollar closed at C$1.0086 to the U.S. dollar,
or 99.15 U.S. cents, down from C$1.0012 to the U.S. dollar, or
99.88 U.S. cents, at Monday's close.
After snapping a three-week streak of gains last week, the
Canadian currency has pushed lower, including a 0.8 percent
decline on Monday and 0.7 percent drop on Tuesday.
The latest decline was pegged to the U.S. dollar's
strength, rather than anything specific to Canada. Fed Chairman
Ben Bernanke, in an address to a conference in Barcelona,
warned about the inflationary impact of a weak currency,
suggesting the central bank may raise rates to support the
dollar and staunch any inflationary pressure.
"There's one event that's pretty much driven the Canadian
dollar and that's the Bernanke comments," said Stewart Hall,
market strategist at HSBC Securities. "He certainly grabbed the
attention of currency markets and caused a fairly broad-based
(U.S.) dollar rally,"
The Fed has slashed its benchmark overnight lending rate by
3.25 percentage points since mid-September. The Bank of Canada
has lowered its key rate 1.50 percentage points to 3.00 percent
since the start of December and is expected to cut another 25
basis points on June 10.
Another drag on commodity-linked Canadian dollar were the
growing concerns about slowing global growth and how that could
weaken prices for the commodities that Canada exports. Oil
prices have steadily fallen from a record above $135 a barrel
reached last month.
The Canadian dollar spent the North American session in a
range of US$1.0045, valuing a U.S. dollar at 99.55 Canadian
cents, and C$1.0097 to the U.S. dollar, or 99.04 U.S. cents,
which marked its lowest in nearly a month.
BOND PRICES REBOUND
Canadian bond prices recouped early losses thanks to an
avian bird flu scare at the second-largest U.S. chicken
producer, and a report that Lehman Brothers Holdings Inc had to
borrow directly from the Fed via the discount window.
Tyson Foods Inc said it would have to get rid of about
15,000 chickens exposed to a mild strain of bird flu that had
no risk to human health. But the news sent a shiver through
financial markets and raised a bid for safe-haven government
Lehman eventually denied that it has borrowed money from
the Fed recently and said it finished the second quarter well
above $40 billion in liquidity. Still, the speculation
rekindled memories of the collapse of Bear Stearns earlier this
"The initial negative tone in in bond markets was on
Bernanke's comments that appear to suggest that the Fed was
through (cutting rates)," said Mark Chandler, fixed income
strategist at RBC Capital Markets.
"But later on, concerns about the brokerage liquidity in
the U.S., and also warnings of bird flu in the U.S., really
The move in bond prices was also held in check ahead of May
employment reports for Canada and the United States on Friday.
The two-year bond rose 11 Canadian cents to C$101.76 to
yield 2.833 percent. The 10-year bond ended up 7 Canadian cents
at C$102.85 to yield 3.625 percent.
The yield spread between the two-year and 10-year bond was
79.2 basis points, up from 73.8 at the previous close.
The 30-year bond fell 12 Canadian cents to C$115.28 for a
yield of 4.095 percent. In the United States, the 30-year
treasury yielded 4.623 percent.
The three-month when-issued T-bill yielded 2.58 percent,
down from 2.63 percent at the previous close.
(Editing by Frank McGurty)
Reuters journalists are subject to the Reuters Editorial Handbook which requires fair presentation and disclosure of relevant interests.
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Elevate Your Trading With The Amazing Trader!
The Amazing Trader includes:
Actionable trading levels delivered to YOUR charts in real-time.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.