Reuters: US Dollar Report: CANADA FX DEBT-C$ ticks higher; eyes on BoC, U.S. GDP

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CANADA FX DEBT-C$ ticks higher; eyes on BoC, U.S. GDP Apr 27th 2012, 12:26 Tweet Share this Email Print Fri Apr 27, 2012 8:26am EDT * C$ at C$0.9824 vs US$, or $1.0179 * Markets to digest Bank of Canada comments; U.S. GDP * Bonds flat to softer across curve By Jennifer Kwan TORONTO, April 27 (Reuters) - Canada's dollar edged higher against its U.S. counterpart on Friday and was on track for its best weekly gain since early March as investors were set to digest more comments from the Bank of Canada. Bank of Canada Governor Mark Carney is scheduled to deliver a presentation on the economic outlook to an Ottawa business audience on Friday morning, and traders and strategists will be looking for any fresh clues on the timing of an interest rate hike. The central bank surprised traders earlier this month by suggesting that it was closer to raising interest rates as economic conditions improve at home and abroad. It kept rates steady at 1 percent, as expected, but signaled that it was starting to think more seriously about tightening monetary policy. "They've been pretty clear about what they intend to do. The more they say it the sooner the market seems to expect it's going to happen," said Shaun Osborne, chief currency strategist at TD Securities. "They've set out their intent. They just need the justification from the numbers." At around 8:10 a.m. (1210 GMT), the Canadian dollar was at C$0.9824 versus the U.S. currency, or $1.0179, slightly higher from Thursday's finish at C$0.9840 versus the U.S. currency, or $1.0163. Although the currency has been stuck in a tight range in recent weeks it was on track to notch its best weekly gain since early March. Still, the currency's gains were vulnerable to broader moves in global equities. Spanish and Italian borrowing rates nudged higher on Friday after a two-notch downgrade of Spain's sovereign credit rating, but world equity and currency markets shrugged off the move and Italy managed to sell almost 6 billion euros of new bonds. The picture appeared brighter in North America as U.S. stocks eyed a fourth day of gains on Friday, helped by upbeat corporate earnings. Osborne said strategists and traders would look to U.S. growth data on Friday for more clues on the economic outlook. In a potential wild card for markets, the first estimate of U.S. first-quarter GDP is expected to show the economy expanded at a 2.5 percent annual rate, a Reuters poll found, versus 3.0 percent in the fourth quarter. Investors have become cautious after signs of a softening recovery. Canadian government bond prices were mostly flat to softer across the curve. Canada's two-year bond sagged 1 Canadian cent to yield 1.381 percent, while the benchmark 10-year bond dropped 5 Canadian cents to yield 2.057 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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