Reuters: US Dollar Report: CANADA FX DEBT-C$ hits 1-week low on risk sell-off

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CANADA FX DEBT-C$ hits 1-week low on risk sell-off Aug 22nd 2012, 12:27 Wed Aug 22, 2012 8:27am EDT * C$ eases to C$0.9927 vs US$ or $1.0074 * Bond prices pick up across the curve * Bank of Canada, retail sales in focus By Claire Sibonney TORONTO, Aug 22 (Reuters) - The Canadian dollar eased to a one-week low against its U.S. counterpart on Wednesday, retreating further from 3-1/2 month highs hit in the previous session as doubts about Europe's progress on its debt crisis and weak export data from Japan underscored the headwinds facing the global economy. Japan's exports slumped the most in six months in July as shipments to Europe and China tumbled, adding to concerns over global demand after a string of dire trade figures from Asia's export engines. A warning from U.S. computer Dell after the market close on Tuesday also weighed on Wall Street, which provided direction for other risky assets. "Risky assets generally are under a little bit of pressure today. I think the lead is really coming from the U.S. equity futures," said Adam Cole, global head of foreign exchange strategy at RBC Capital Markets in London. Wednesday's Canadian retail sales data, comments from Bank of Canada's Mark Carney who is speaking to the Canadian Auto Workers union and the U.S. Federal Reserve's policy-meeting minutes will be in focus for the rest of the day. "Potentially, Carney has the ability to move the market quite significantly if he's as hawkish as he was taken to be a couple of weeks ago on reiterating the tightening bias which obviously no other central bank has," added Cole. Any more confirmation that Carney is comfortable with a relatively strong exchange rate would also be expected to lift the Canadian dollar. At 8:08 a.m. (1208 GMT), the Canadian dollar was at C$0.9920 versus the U.S. dollar, or $1.0081, weaker than Tuesday's North American session close at C$0.9897, or $1.0104. Earlier, it drifted as low as C$0.9927, or $1.0074, its softest level since Aug. 15. Cole estimated the day's range for the Canadian dollar to hold between Tuesday's strongest point around C$0.9840 versus the greenback and parity on the downside. Against the euro, the Canadian dollar hit its weakest level in two weeks. Still, investors questioned whether signs of progress in Europe warranted the recent market rally. The next few days will kick off a string of meetings that could go a long way in shaping the future course of the euro zone debt crisis. Greek Prime Minister Antonis Samaras meets with the head of the Eurogroup of euro zone finance ministers, Jean-Claude Juncker, in Athens before travelling later in the week to see German Chancellor Angela Merkel and French President François Hollande. Canadian bond prices picked up across the curve, with the two-year bond adding 3 Canadian cents to yield 1.168 percent, and the benchmark 10-year bond gaining 19 Canadian cents to yield 1.910 percent. Link this Share this Digg this Email Reprints

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