Reuters: US Dollar Report: CANADA FX DEBT-C$ weakens on global growth fears

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CANADA FX DEBT-C$ weakens on global growth fears Mar 29th 2012, 13:53 Tweet Share this Email Print Thu Mar 29, 2012 9:53am EDT * C$ at C$1.009 vs US$, or 99.91 U.S. cents * U.S. jobless claims drop * Euro-zone debt fears resurface * Bond prices higher across the curve By Jon Cook TORONTO, March 29 (Reuters) - The Canadian dollar slid for the third straight session against the U.S. currency on Thursday as worries about the global economy continued to hurt commodity prices. Oil, gold and industrial metals such as copper have tumbled this week after U.S. Federal Reserve Chairman Ben Bernanke stoked doubt about the strength of the U.S. economic recovery, saying conditions remain fragile. Mixed U.S. data on Thursday didn't help clarify the picture for investors. Weekly claims for jobless benefits fell to a four-year low, but were still more than expected in a Reuters survey. Also, data showed the U.S. economy expanded as expected in the fourth quarter, which came on the heels of Wednesday's soft durable goods numbers. Cracks in the U.S. recovery are showing at a time when investors are worried about a possible slowdown in China, after the world's top consumer recently lowered its growth outlook for this year to below 8 percent. "The catalyst is mainly concern about the state of the global economy," said Charles St-Arnaud, Canadian economist and currency strategist at Nomura Securities International in New York. "You see risky assets across the globe selling off and that's putting pressure on the Canadian dollar." At 9:25 a.m. (1325 GMT), the Canadian dollar was at C$1.009 versus the U.S. currency, or 99.91 U.S. cents, down from Wednesday's close at C$0.9979 versus the U.S. dollar, or $1.0021. In Europe, concerns about contagion from the euro-zone debt crisis resurfaced as Italian and Spanish bond yields rose and investors braced for a tough budget from Spain on Friday that could make it harder for the country to return to growth. Statistics Canada data on Thursday showed producer prices climbed by 0.2 percent in February from January, but the increase was less than the 0.4 percent forecast by analysts. Traders were looking ahead to the release of the Canadian government's 2012-13 fiscal budget after markets close on Thursday. It was not expected to have a large impact on the Canadian dollar. "The more front-loaded the cost cuts are, the more negative an impact it will have on the Canadian economy," said St-Arnaud. He said the Canadian dollar should hover between parity with the U.S. dollar and a high of C$0.9850 versus the greenback, or $1.0150. The waning risk appetite was reflected in higher Canadian bond prices. Canada's two-year bond rose 5 Canadian cents to yield 1.170 percent, while the 10-year bond added 23 Canadian cents to yield 2.092 percent. Tweet this Link this Share this Digg this Email Reprints Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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