Reuters: US Dollar Report: CANADA FX DEBT-C$ steadies from 4-week high ahead of Fed decision

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CANADA FX DEBT-C$ steadies from 4-week high ahead of Fed decision Jun 20th 2012, 13:27 Tweet Share this Email Print Wed Jun 20, 2012 9:27am EDT * C$ flat at C$1.0181 vs US$, or 98.22 U.S. cents * Earlier, C$ hit 4-week high against greenback * Bond prices retreat across curve * FOMC statement due at 12:30 ET By Claire Sibonney TORONTO, June 20 (Reuters) - The Canadian dollar steadied against the U.S. dollar on Wednesday after hitting its strongest level in more than four weeks, as investors hesitated to be too optimistic that the U.S. Federal Reserve will announce further monetary stimulus later in the day. Amid rising financial strains in Europe, a year-end fiscal showdown in Washington and a sharp slowdown in hiring by U.S. employers, expectations have risen that the central bank will extend its bond-buying program, dubbed "Operation Twist." The Fed's Open Market Committee's policy statement is due at 12:30 p.m. (16:30 GMT), followed by the Summary of Economic Projections at 2 p.m. and Chairman Ben Bernanke's press conference at 2:15 p.m. "It certainly seems to be that the market is placing some sort of onus or impetus on extending Operation Twist or giving a nod to further quantitative easing, so the proof will be in the pudding really and we'll take our cue from the announcement," said Matt Perrier, director of foreign exchange sales at BMO Capital Markets. "Certainly if there's no inclination towards an extension of the Operation Twist or any additional easing then I think this recent risk rally will unwind rather quickly." At 9:15 a.m., the Canadian dollar stood at C$1.0181 versus the U.S. dollar, or 98.22 U.S. cents, little changed from Tuesday's North American close at C$1.0182 versus the U.S. dollar, or 98.21 U.S. cents. Earlier, the currency hit a high of C$1.0159, or 98.43 U.S. cents, its strongest level since May 22. "It's good news if you're a U.S. dollar buyer," added Perrier. He put U.S. dollar support around C$1.0125, near the 50 percent retracement level from its April low against the Canadian dollar around C$0.98 to a high of C$1.0446 reached a couple weeks ago. Perrier sees near-term resistance for the U.S. dollar between C$1.02 and C$1.0225. Canadian bond prices retreated across the curve. Canada's two-year bond fell 8 Canadian cents to yield 1.081 percent, while the benchmark 10-year bond dropped 31 Canadian cents to yield 1.792 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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