Wednesday September 30, 2009 - 21:22:05 GMT
Share This Story
Reuters - www.reuters.com
Forex Market News - CANADA FX DEBT-C$ ends higher on oil despite flat GDP
Wed Sep 30, 2009 4:41pm EDT
* Canadian dollar rises to 93.40 U.S. cents
* Currency market disregards flat GDP figure for July
* Bonds gain across the board
(Updates to close)
By Ka Yan Ng
TORONTO, Sept 30 (Reuters) - The Canadian dollar closed
higher against the U.S. currency on Wednesday as it tracked
buoyant oil and gold prices and shrugged off figures that
showed the domestic economy did not grow in July.
The price of oil CLc1, a key Canadian export, jumped more
than 5 percent to settle above $70 a barrel as the greenback
fell against major currencies [O/R] [FRX/], while gold prices
climbed to above $1,000 an ounce. [GOL/]
The Canadian dollar closed at C$1.0707 to the U.S. dollar,
or 93.40 U.S. cents, up from Tuesday's finish of C$1.0855 to
the U.S. dollar, or 92.12 U.S. cents. During the day, it hit a
one-week high at C$1.0672 to the U.S. dollar, or 93.70 U.S.
"Certainly commodity prices are generally helping. We've
seen quite a strong rise in oil prices, back towards $70 a
barrel and that is typically a good source of support," said
Shaun Osborne, chief currency strategist at TD Securities.
Government data on Wednesday showed there was no economic
growth in Canada in July, disappointing expectations for a 0.5
percent increase in gross domestic product after June's 0.1
percent month-on-month rise. [ID:nOTT003730]
The currency took the report in stride, even though the
stagnant growth offered a downbeat start to the third quarter.
Helping to counterbalance the GDP figures, home resale prices
climbed for a third straight month in July, up 1.6 percent, the
Teranet-National Bank Composite House Price Index showed.
"Most people realize the economy, from a growth point of
view, is still struggling," Osborne said. "There are other
positive things to offset the simplistic look at the growth
number. We generally think that Canada is in a good fundamental
position overall still."
CIBC World Markets said in a report on Wednesday that it
expects the U.S. dollar will weaken further in 2010 on concern
about the U.S. current account deficit, but that the Canadian
dollar is unlikely to strengthen much in response.
Beyond 2011, however, CIBC chief economist Avery Shenfeld
said the Canadian dollar will have "room to run" against the
greenback if commodity price gains improve Canada's trade
balance and if the United States lets its inflation rate run up
faster than other countries.
Canadian bonds were higher across the curve after
seesawing earlier in the day on mixed U.S. data.
The U.S. economy contracted at slower pace than previously
thought in the second quarter, but the market took a further
decline in private payrolls in September as another indication
that recovery from recession would be patchy. [ID:nN30198553]
Building on that sentiment, another report showed business
activity in the U.S. Midwest failed to return to growth in
September [ID:nN30198553], boosting the appeal of safe-haven
The two-year bond CA2YT=RR was up 4 Canadian cents at
C$99.50 to yield 1.265 percent, while the 10-year bond
CA10YT=RR gained 17 Canadian cents to C$103.55 to yield 3.316
percent. The 30-year bond CA30YT=RR climbed 35 Canadian cents
to C$119.60 to yield 3.842 percent.
(Reporting by Ka Yan Ng; editing by Peter Gallowa
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
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."