Reuters: US Dollar Report: CANADA FX DEBT-C$ eases from 3-1/2 month high amid Fed caution

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CANADA FX DEBT-C$ eases from 3-1/2 month high amid Fed caution Aug 29th 2012, 12:26 Tweet Share this Email Print Wed Aug 29, 2012 8:26am EDT * C$ softens to C$0.9888 vs US$, or $1.0113 * Bond prices also drift lower By Claire Sibonney TORONTO, Aug 29 (Reuters) - The Canadian dollar slipped against the U.S. dollar on Wednesday, easing from a 3-1/2 month high hit in the previous session, but stuck in a tight range as investors hesitated to make big bets ahead of a key speech by Federal Reserve Chairman Ben Bernanke on Friday. Bernanke is scheduled to address a conference of central bankers in Jackson Hole, Wyoming, and could signal new measures to boost growth. He is expected to stoke expectations for a third round of quantitative easing, though he may not detail the timing of such a measure. A slew of European and North American economic data including the Norwegian central bank's rate decision, German inflation, Canadian producer prices and U.S. GDP were expected to provide some further direction. "It won't be for a lack of data but the market itself is myopic with respect to Jackson Hole and it's long on anticipation and it's short on tolerance," said Jack Spitz, managing director of foreign exchange at National Bank Financial. Traders also speculated that news European Central Bank President Mario Draghi was too busy to attend Friday's Jackson Hole meeting renewed hopes he could announce a long-awaited plan to bring down Spanish and Italian borrowing costs at the ECB's Sept. 6 policy meeting. "The market may be disappointed by (Draghi) as well but I think we're talking about event risks as they happen and they're going to be fast and furious starting this Friday," added Spitz. At 8:07 a.m. (1207 GMT), the Canadian dollar stood at C$0.9888 versus the greenback, or $1.0113, softer than Tuesday's North American session close at C$0.9878 against the U.S. dollar, or $1.0124. Lower oil prices did little to help Canada's commodity-driven currency on Friday as Hurricane Isaac, which hit land in Louisiana, left U.S. Gulf Coast oil production facilities without significant damage. So far on Friday, the Canadian dollar traded in a narrow 23-point range between C$0.9876-99. Spitz saw near-term Canadian dollar support around C$0.9920 and resistance around C$0.9843. Canadian bond prices drifted lower across the curve, with the two-year bond off 2 Canadian cents to yield 1.176 percent and the benchmark 10-year bond down 7 Canadian cents to yield 1.805 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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