Reuters: US Dollar Report: CANADA FX DEBT-C$ edges higher as Fed, GDP eyed

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CANADA FX DEBT-C$ edges higher as Fed, GDP eyed Aug 27th 2012, 20:37 Mon Aug 27, 2012 4:37pm EDT * C$ at C$0.9908 vs. $US or $1.0093 * Bond prices mixed * C$ awaiting Fed meeting, Canadian GDP for direction By Solarina Ho TORONTO, Aug 27 (Reuters) - The Canadian dollar rose modestly against the U.S. dollar o n M onday as markets eyed major events later this week for further direction. The currency tracked global stocks, which traded in a narrow range on hopes of further stimulus from central banks. "It's just one of those days where nothing's moving dramatically ... People are trying to take some cues from the whole thought of QE3 for the U.S.," said Don Mikolich, executive director of foreign exchange sales at CIBC World Market. The Canadian dollar traded at C$0.9908 against the U.S. dollar, or $1.0093, firmer than Friday's North American close at C$0.9916, or $1.0085. The currency traded in a tight range and volume, already seasonally light, was particularly thin on Monday due to a summer bank holiday in Britain. "Canada does seem somewhat comfortable in this C$0.99 range," said Mikolich. "If there's a breakout, it's probably to the upside back above par because we've had some undesirable developments in Europe that have people fleeing to the safety of the U.S. dollar," he said. Friday's meeting of central bankers from around the world in Jackson Hole, Wyoming, will kick off a busy September that will bring a number of key meetings, events and data that could drive direction for the Canadian dollar. The annual meeting, hosted by the Kansas City Fed, could hint at the U.S. central bank's monetary policy to come. Markets will be looking for clues as to when Chairman Ben Bernanke may unleash a third round of bond purchases to spur the sputtering U.S. recovery. Also in focus will be Friday's Canadian gross domestic product figures, which are expected to be soft. "In Canada, domestic demand (has been) shouldering the burden for the economic growth in the country and that's expected to remain the case," said Mazen Issa, macro strategist with TD Securities, adding that exports were expected to drag on growth. "A lot of data over the course of the quarter suggested that business investment is not going to be particularly strong. That's associated with the heightened global uncertainty." Canadian bond prices were mixed, with the two-year bond down one Canadian cent to yield 1.158 percent and the benchmark 10-year bond up 30 Canadian cents to yield 1.801 percent. Link this Share this Digg this Email Reprints

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