Friday November 20, 2009 - 23:16:25 GMT
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Reuters - www.reuters.com
Forex Market News - CANADA FX DEBT-C$ falls with commodities as risk appetite wanes
Fri Nov 20, 2009 5:15pm EST
* C$ falls to C$1.0699 to U.S. dollar
* Currency down 1.8 pct for the week
* Sluggish oil, equity prices weigh
(Updates to close, adds quotes)
TORONTO, Nov 20 (Reuters) - The Canadian dollar fell on
Friday, mirroring losses in commodity and stock markets, as
many investors sold riskier assets on concerns about global
growth and to lock in gains as year-end approaches.
The currency was also hit by broad-based gains by the U.S.
dollar against a range of currencies for a second session as
the greenback benefited from the drop in risk tolerance.
The Canadian dollar touched a session low of C$1.0733 to
the U.S. dollar, or 93.17 U.S. cents, its weakest level since
The unit "hasn't really exhibited much strength at all. It
seems to me a fair portion of this does fall to the U.S.
dollar," said Eric Lascelles, chief economics and rates
strategist at TD Securities.
Canada's currency finished at C$1.0699 to the U.S. dollar,
or 93.47 U.S. cents, down from Thursday's close C$1.0635 to the
U.S. dollar, or 94.03 U.S. cents.
The greenback's gain and falling risk appetite hit
commodity prices, which heavily influence the Canadian dollar
because the country is a commodity exporter.
Oil edged lower, dropping nearly 1 percent to below $77 a
barrel, extending a 2 percent fall in the previous session.
The market appeared to shrug off comments late on Thursday
from Bank of Canada Governor Mark Carney who said Canada's
economy performed worse than expected in the third quarter and
risks further setbacks due to the sharp rise of the Canadian
Finance Minister Jim Flaherty vowed on Friday to resist
big, new spending measures in his next budget, but said it was
too early to pull stimulus away from a still shaky economy.
A report out on Friday showed Canadian bankruptcies rose
about 29 percent in September from a month earlier, as
consumers felt the squeeze of rising debt and a weak job
Canadian economic reports due out next week include monthly
retail sales and third-quarter current account data. ECONCA
BOND PRICES MOSTLY FIRMER
With no major Canadian economic data out on Friday, most
domestic bond prices tracked moves in the big U.S. Treasury
market, where short-term issues rallied on fund demand before
the year's end. [US/]
"It has long been our view that the Canada short end has
been cheap and some of that mis-valuation is being worked out
in the market today," said Lascelles.
"This is very much a day of adjustment as opposed to
responding to any particular news."
The two-year bond CA2YT=RR rose 2.5 Canadian cents to
C$99.99 to yield 1.255 percent, while the 30-year bond
CA30YT=RR fell 30 Canadian cents to C$117.75 to yield 3.937
Canadian bonds outperformed their U.S. counterparts across
much of the curve. The Canadian 10-year bond was 1.8 basis
points above the U.S. 30-year yield, compared with 4.5 basis
points on Thursday.
(Reporting by Jennifer Kwan and Jeffrey Hodgson; editing by
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