Reuters: US Dollar Report: CANADA FX DEBT-C$ weakens to parity, bank downgrade risk weighs

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CANADA FX DEBT-C$ weakens to parity, bank downgrade risk weighs Oct 29th 2012, 12:49 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Mon Oct 29, 2012 8:49am EDT * C$ at C$0.9996 to US$, or $1.0004, after hitting parity * Moody's eyes Canadian bank downgrades * Hurricane Sandy likely to limit FX volume By Alastair Sharp TORONTO, Oct 29 (Reuters) - The Canadian dollar weakened to parity with its U.S. counterpart on Monday for the first time since August, as downbeat corporate earnings hurt the global growth outlook and a massive storm threatened the U.S. East Coast. The currency also took a hit after Moody's said on Friday it was reviewing five top Canadian banks for possible rating downgrades due to concerns about a softening economy and volatile capital markets. The move was supported by broader strength in the U.S. dollar, and was expected to continue beyond the psychological barrier. "We should see some decent buying interest above parity, but this is just on the back of a more general (U.S.) dollar move," said Elsa Lignos, a London-based currency strategist at Royal Bank of Canada. At 8:20 a.m. (1220 GMT) the Canadian dollar was trading at C$0.9996 to the greenback, or $1.0004, compared with C$0.9980, or $1.0020, at Friday's North American close. Earlier Monday, the Canadian dollar traded at equal value with the U.S. dollar. Hurricane Sandy forced New York and other cities to close their public transport systems and schools and order mass evacuations. All U.S. stock markets were closed on Monday and may also be shut on Tuesday. Volumes in the foreign exchange market were also expected to be light. Canadian government debt outperformed its U.S. equivalent in all but the 30-year tenure, with the two-year bond up 4 Canadian cents to yield 1.101 percent, and the benchmark 10-year bond adding 28 Canadian cents to yield 1.808 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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