Wednesday October 21, 2009 - 12:20:56 GMT
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Reuters - www.reuters.com
Forex Market News - CANADA FX DEBT-C$ stumbles as BoC impact lingers overnight
Wed Oct 21, 2009 7:54am EDT
* C$ falls to lowest level since Oct. 8
* Lower oil prices also weigh on currency
* Bond prices lower across the curve
By Frank Pingue
TORONTO, Oct 21 (Reuters) - Canada's currency fell against
the U.S. dollar on Wednesday as traders overseas got a chance
to react to the Bank of Canada warning that a strong domestic
currency was undermining economic recovery.
A slide in the price of oil, a key Canadian export, toward
$78 a barrel given a bigger-than-expected increase in crude oil
inventories was also weighing on the currency. [O/R]
It was enough to send Canada's dollar down to C$1.0578 to
the U.S dollar, or 94.654 U.S. cents, its lowest since Oct. 8.
The slide followed a drop of near 2 U.S. cents on Tuesday when
the Bank of Canada suggested it will not follow Australia in
hiking interest rates quickly. [ID:nN19231469]
"You do have this little matter of the Bank of Canada,
which London didn't get a chance to react to that much
yesterday," said David Watt, senior currency strategist at RBC
Capital Markets. "We're also in the period between the Bank of
Canada statement and the MPR, when the market has to reassess
if it missed something."
On Thursday, the Bank of Canada will release it Monetary
Policy Report, followed by a news conference with Governor Mark
At 7:40 a.m. (1140 GMT), the Canadian unit was at C$1.0575
to the U.S. dollar, or 94.56 U.S. cents, down from C$1.0508 to
the U.S. dollar, or 95.17 U.S. cents, at Tuesday's close.
Domestic bond prices, with no Canadian data to consider,
were stuck lower across the curve alongside a weaker U.S.
(Editing by Padraic Cassidy)
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