Reuters: US Dollar Report: CANADA FX DEBT-C$ stronger as China helps offset 'cliff' worry

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CANADA FX DEBT-C$ stronger as China helps offset 'cliff' worry Dec 31st 2012, 15:30 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Mon Dec 31, 2012 10:30am EST * C$ at C$0.9953 to US$, or $1.0047 * U.S. fiscal talks provide most interest; China data helps * C$ on track for 2.4 percent gain for year By Alastair Sharp TORONTO, Dec 31 (Reuters) - The Canadian dollar strengthened slightly on Monday, with healthy Chinese manufacturing data taking some sting out of worries about the United States as politicians there hold last-minute talks to avoid a fiscal crunch of spending cuts and tax hikes. A survey of China's vast manufacturing sector showed it had grown in December at its fastest pace since May 2011, pointing to a possible rebound after its slowest year of expansion since 1999. China's appetite for raw materials provides a boost to Canadian resource companies. But Canada still depends most on the United States for its exports, meaning that the risk of a politically induced recession there weighs heavily on the currency. "The No. 1 hurdle that investors are trying to get over is the fiscal cliff situation in the U.S.," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. U.S. politicians have yet to reach a deal to avert the "fiscal cliff" and have only a few hours of legislative time scheduled in which to act if an agreement materializes. "Depending on how we clear that hurdle, successfully or not, that should set the tone for growth currencies and overall risk sentiment," Manimbo added. At 9:47 a.m. (1447 GMT) the Canadian dollar was trading at C$0.9953 to the greenback, or $1.0047, compared with C$0.9965, or $1.0035, at Friday's North American close. The Canadian dollar is likely to trade between C$0.9886 and C$0.9990, near its 100- and 200-day moving averages, Scotiabank analysts wrote in a note to clients. The currency is in track to record a 2.1 percent gain against the U.S. currency. The two-year bond was off 3 Canadian cents to yield 1.140 percent, while the benchmark 10-year bond fell 27 Canadian cents to yield 1.798 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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