Friday November 27, 2009 - 23:55:16 GMT
Share This Story
Reuters - www.reuters.com
Forex News - CANADA FX DEBT-C$ closes flat after recouping early losses
Fri Nov 27, 2009 4:22pm EST
* Currency closes at C$1.0615 per US$
* Recovery follows sharp fall on Thursday
* Monday's quarterly domestic GDP data eyed
* Bond prices lower across the curve
(Updates to close)
By Frank Pingue
TORONTO, Nov 27 (Reuters) - Canada's currency pared nearly
all the losses it suffered early on Friday to close almost flat
as fears about fallout from Dubai's debt problems eased.
The Canadian dollar had tumbled to C$1.0750 to the U.S.
dollar, or 93.02 U.S. cents, its lowest level in nearly three
weeks as risk-aversion jumped on concern about the once-booming
Gulf region's financial health.
The decline followed a drop of more than 1 U.S. cent on
Thursday when news about the emirate's troubles first emerged.
But the currency managed to lure buyers and erase its early
skid in a move analysts said was likely exaggerated by thin
trade given an early market close in the United States.
"Armageddon failing to unfold would be the best
explanation," said David Watt, senior currency strategist RBC
Capital Markets. "The risk environment didn't really seem to
grab markets by the throat like it looked like it might
yesterday and earlier today."
The Canadian dollar closed at C$1.0615 to the U.S. dollar,
or 94.21 U.S. cents, down only slightly from C$1.0605 to the
U.S. dollar, or 94.30 U.S. cents, at Thursday's close.
Canada's dollar had little reaction to data that showed
Canada's current account deficit swelled in the third quarter
to a record high of C$13.12 billion, slightly lower than the
C$13.35 billion shortfall forecast. [ID:nN27257696]
For the week, the currency rose 0.8 percent, due largely to
gains made in recent sessions tied to upbeat Canadian data,
strong commodity prices and news that Russia's central bank
said it wants to invest some of its reserves in the currency.
Concern that Dubai may default on debt payments had been
widely expected to ripple through financial markets for a
second day on Friday, but Toronto's main stock index also
managed to steer clear of another wave of selling.
The index rebounded from an early 1 percent fall, with the
recovery led by banks, as financial stocks overcame worries
about Dubai's debt problems. [.TO]
Liquidity was thin after the U.S. Thanksgiving holiday. The
currency is also expected to stick in a tight range now ahead
of Monday's key third-quarter gross domestic product figures,
expected to herald Canada's return to growth. [ID:nN26398658]
BOND PRICES DROP
Canadian bond prices relinquished early gains and were down
across the curve as investors overcame earlier worries about
Dubai and had less appetite for more secure government debt.
The two-year Canadian government bond CA2YT=RR was down 3
Canadian cents at C$100.26 to yield 1.118 percent, while the
10-year bond CA10YT=RR slipped 15 Canadian cents to C$104.30
to yield 3.221 percent.
Canadian bonds underperformed their U.S. counterparts
across much of the curve. The Canadian 10-year bond yield was
1.40 basis point above its U.S. counterpart, compared with 6.50
basis points below on Thursday.
(Editing by Peter Galloway)
((email@example.com ; +1 416 941-8094; Reuters
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."