Reuters: US Dollar Report: CANADA FX DEBT-C$ slips on negative German headlines

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CANADA FX DEBT-C$ slips on negative German headlines Jul 18th 2012, 12:21 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Wed Jul 18, 2012 8:21am EDT * C$ dips to C$1.0136 vs US$, or 98.66 U.S. cents * Bond prices climb across curve * German 2-yr bonds sell at negative yield for first time By Claire Sibonney TORONTO, July 18 (Reuters) - Canada's dollar eased from a near two-week high against the U.S. dollar on Wednesday, tracking the euro lower as Germany - considered Europe's safest haven - sold bonds at a negative yield for the first time. The top-up auction of two-year bonds raised 4.173 billion euros and follows short-term Treasury bill sales at negative yields by Germany and other higher-rated euro zone states. Traders also cited a media report that quoted German Chancellor Angela Merkel as saying she could not be sure the European project would work. "I think that Germany issuing two-year bonds with a negative yield for the first time and Merkel's comments certainly, in my mind, underscore what's wrong in Europe and will weigh on the euro," said Jack Spitz, managing director of foreign exchange at National Bank Financial. "It's pushing the U.S. dollar higher and as it goes higher, it goes higher against everything including the Canadian dollar." Later in the day, markets will also be paying close attention to the Bank of Canada's quarterly Monetary Policy Report and press conference. The Bank of Canada left interest rates unchanged on Tuesday but maintained its rate-hiking bias, the same day Federal Reserve Chairman Ben Bernanke said the U.S. central bank stands ready to take further steps to stimulate the economy. At 8:07 a.m. (1207 GMT), the Canadian dollar was at C$1.0136 versus its U.S. counterpart, or 98.66 U.S. cents, slightly weaker than Tuesday's North American session at C$1.0126 against the greenback, or 98.76 U.S. cents. Spitz noted that the 200-day moving average was still providing significant support for the U.S. dollar versus Canada's around C$1.0109: "A close below the 200-day moving average technically does set up dollar/Canada for a move lower towards better support near parity." Canadian bond prices climbed across the curve amid the broader risk-averse mood in markets. The two-year government bond rose 4 Canadian cents to yield 0.957 percent, while the benchmark 10-year bond added 22 Canadian cents to yield at 1.618 percent. Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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