Friday June 18, 2010 - 21:03:23 GMT
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Reuters - www.reuters.com
Forex News - CANADA FX DEBT-C$ breaks two-day slide, bonds edge lower * C$ climbs to 97.92 U.S. cents
* Bond prices ease but most outperform U.S. Treasuries
* Canada May leading indicator rises 0.9 pct
By Ka Yan Ng
TORONTO, June 18 (Reuters) - The Canadian dollar ended
firmer on Friday, ending a two-day slide and breaking above a
key techncial level, as oil prices climbed and moderate gains
on equity markets provided support.
The price of oil, often a driver of Canada's
commodity-linked currency, pushed above $77 a barrel to erase
early losses. Support was also drawn from stock markets, which
were higher for most of the day. [.TO] [.N] [O/R]
"The price of oil is doing OK and that's Canada positive.
Equities are marginally higher but there's just a general sort
of treading water in markets," said Brendan McGrath at currency
services firm Custom House.
"I think what's important to note with dollar/Canada right
now is that it's broken below C$1.0250."
The currency had been testing that key technical level much
of the week and was not able to break through significantly
until Friday, when it reached C$1.0207 to the U.S. dollar.
If the currency holds stronger than C$1.0250, then this
could auger well for further advances against the greenback
unless there are dire developments in Europe, McGrath said.
The Canadian dollar closed at C$1.0212 to the U.S. dollar,
or 97.92 U.S. cents. That is up from Thursday's close of
C$1.0270 to the U.S. dollar, or 97.37 U.S. cents. For the week,
it was up 1.2 percent.
A rise in the composite leading indicator for May, a broad
measure of the Canadian economy, also helped support the
Canadian dollar. Its 0.9 percent rise from April, the 12th
straight monthly gain, was greater than the 0.7 percent advance
expected by market operators. [ID:nN18228501] [ID:nN18136363]
The figures helped balance lower than expected data earlier
this week on home resales for May and wholesale trade in April.
Canadian government bond prices posted slim losses with few
catalysts to spark a meaningful move.
Investors largely shrugged off a speech by Bank of Canada
Governor Mark Carney, who cautioned investors again on Friday
not to take another interest rate hike for granted, saying
volatile global conditions mean no particular path for monetary
policy is preordained. [ID:nN18116394]
The two-year government bond CA2YT=RR dipped 4 Canadian
cents to yield 1.742 percent, while the 10-year bond
CA10YT=RR fell 21 Canadian cents to yield 3.328 percent.
Canadian bonds mostly outperformed against U.S. Treasuries,
except in the 30-year maturity. The Canadian 10-year bond yield
was 10.2 basis points above its U.S. counterpart, compared with
11.1 basis points on Thursday.
In new issues, Genworth MI Canada Inc sold C$275 million of
10-year senior unsecured debentures on Friday, according to a
term sheet seen by Reuters. [ID:nN18150378]
(Reporting by Ka Yan Ng; editing by Peter Galloway)
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