Tuesday September 15, 2009 - 20:46:48 GMT
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Reuters - www.reuters.com
Forex Market News - CANADA FX DEBT-C$ rises on US retail sales, most bonds fall
Tue Sep 15, 2009 4:42pm EDT
* C$ ends at 93.34 U.S. cents after hitting one-week high
* Bonds fall after encouraging U.S. economic data
(Adds details, quote)
TORONTO, Sept 15 (Reuters) - Canada's dollar rose to a
one-week high against the greenback on Tuesday, powered by a
rise in the price of oil as more signs of economic recovery
The currency started to move higher after data showed sales
at U.S. retailers in August rose at their fastest pace in 3-1/2
years, while a gauge of manufacturing in New York State hit a
near two-year high. [ID:nN15548319]
"It's pretty encouraging for the States and for risk, so as
a result the U.S. dollar got sold on that," said Brendan
McGrath, senior foreign exchange trader at currency services
firm Custom House in British Columbia.
McGrath also cited comments by U.S. Federal Reserve
Chairman Ben Bernanke, who said the recession likely has ended
but that recovery will be moderate at best. The remarks
encouraged the market's willingness to buy currencies other
than the safe-haven U.S. dollar. [ID:nLF110181]
In declaring the recession over, Bernanke went slightly
beyond the Fed's most recent assessment that the economy was
leveling off and that indications of growth had improved.
The price of oil CLc1, a key Canadian export, settled
just below $71 a barrel, up 3 percent after a tepid start,
[ID:nSP312072] and helped support the currency. Oil's rise also
boosted the Toronto stock market's resource-heavy main index.
The Canadian currency is often swayed by the direction of
stock markets and commodity prices, each seen as a yardstick of
appetite for risk.
The Canadian dollar closed at C$1.0714 to the U.S. dollar,
or 93.34 U.S. cents, just shy of the one-week high of C$1.0711
to the U.S. dollar, or 93.36 U.S. cents, that was hit earlier
in the day.
It also finished higher than Monday's close at C$1.0835 to
the U.S. dollar, or 92.29 U.S. cents.
Canadian data released on Tuesday had little impact on the
currency and bonds. Labor productivity was unchanged in the
second quarter, Statistics Canada said, marking five straight
quarters of stagnation. [ID:nN15307691]
MOST BONDS WEAKEN
Canadian bond prices were mostly lower as the reassuring
U.S. economic data pushed investors toward riskier assets.
Toronto stocks rose steadily from midmorning to the close,
[ID:nTOR004974] while U.S. stocks were also encouraged by the
day's economic data. Bonds and stocks typically trade
The two-year bond CA2YT=RR slipped 2 Canadian cents to
C$99.53 to yield 1.244 percent, while the 10-year bond
CA10YT=RR fell 3 Canadian cents to C$103.10 to yield 3.372
percent. The 30-year bond CA30YT=RR, however, rose 20
Canadian cents to C$118.60 to yield 3.896 percent.
Canadian bonds mostly outperformed their U.S. counterparts.
The Canadian 10-year bond yield moved to 7.9 basis points below
its U.S. counterpart, compared with 5.6 basis points on
(Reporting by Ka Yan Ng and Jennifer Kwan; editing by Peter
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