Reuters: US Dollar Report: CANADA FX DEBT-C$ steady after mixed data and rate signals

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CANADA FX DEBT-C$ steady after mixed data and rate signals Oct 25th 2012, 20:43 Tweet Share this Email Print Thu Oct 25, 2012 4:43pm EDT * C$ ends up at C$0.9939 versus the US$, or $1.0061 * Stalled U.S. business spending hurts C$ * Positive signs from China, UK help support sentiment * Investors still uncertain about Canadian rate outlook By Claire Sibonney TORONTO, Oct 25 (Reuters) - The Canadian dollar ended slightly stronger against its U.S. counterpart on Thursday, tracking commodity prices and equities higher in choppy trading. But the currency gave up most of its bigger earlier gains as encouraging economic data from Britain and China was offset by uncertainty about the U.S. economy, and as investors digested recent mixed signals from the Bank of Canada. Traders of the resource-linked currency have been trying to sort out confusion over comments by central bank Governor Mark Carney about the direction and timing of future interest rate moves. "(The Canadian dollar) has mainly been trading sideways," said Charles St-Arnaud, Canadian economist and currency strategist at Nomura Securities International in New York. "I think investors are trying to digest all the conflicting information that we got from the Bank of Canada over the past week." The central bank has in the past week and a half whipsawed the markets with hawkish and less hawkish messages on rates, concluding on Wednesday by saying that rates are still likely to rise, but a slowing economy means that higher rates have become "less imminent". A Reuters poll on Wednesday showed Canada's primary dealers expect the Bank of Canada to hold off raising interest rates until late next year or 2014. The Canadian dollar ended the North American session at C$0.9939 to the greenback, or $1.0061, compared with C$0.9949, or $1.0051, at Wednesday's North American close. The currency, sensitive to any clues on the global growth outlook, was supported by signs of recovery in China and a bounce out of recession in Britain, which helped lift global sentiment and commodity prices. But by early afternoon, those gains had been nearly erased, tracking volatility in other riskier assets after data showed U.S. business investment stalled in September. "The short-term rebound we're seeing in risk at the moment may well struggle to see much follow-through," said Shaun Osborne, chief currency strategist at TD Securities. Canadian bond prices eased across the curve, tracking U.S. Treasuries lower. The two-year bond was off 6 Canadian cents to yield 1.149 percent, while the benchmark 10-year bond fell 44 Canadian cents to yield 1.898 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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