Reuters: US Dollar Report: CANADA FX DEBT-C$ weakness masked by U.S. dollar slip

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CANADA FX DEBT-C$ weakness masked by U.S. dollar slip Jan 22nd 2013, 13:54 Tweet Share this Email Print Tue Jan 22, 2013 8:54am EST * C$ at C$0.9932 to US$, or $1.0068 * Weaker versus yen, euro, Aussie * Retail sales jump provides moderate support By Alastair Sharp TORONTO, Jan 22 (Reuters) - The Canadian dollar was flat against its U.S. counterpart on Tuesday but weakened significantly versus a string of other currencies as the two North American units faded. The Japanese yen rose after that country's central bank said it would switch to an open-ended commitment to buy assets next year, though the delayed implementation disappointed those who expected more aggressive monetary easing. The slip in the Canadian currency extended a recent split from the fate of commodities and equity markets and showed much more sympathy with its U.S. cousin. "It's symptomatic of a slightly worse turn for the U.S. dollar, which tends to drag the Canadian dollar down on the crosses," said Royal Bank of Canada currency strategist Elsa Lignos. At 8:43 a.m. (1343 GMT) the Canadian dollar was trading at C$0.9932 to the greenback, or $1.0068, exactly the same level at which it closed Monday's North American session. It weakened sharply against the yen, the British pound and the Australian and New Zealand dollars. The currency took heart from record high domestic retail sales data released on Tuesday, which showed shoppers bought more new cars and electronics. "Retail sales is another piece of positive data that will help cap Canadian weakness going forward," said Michael O'Neill, vice president of foreign exchange trading at Jitneytrade. But he warned, "You can't read too much into Canada solo." RBC's Lignos said the Canadian dollar was near the top of its expected range for the week and would be unlikely to weaken much further without a major surprise from the Bank of Canada's policy announcement due on Wednesday. "The Bank of Canada is the pick of the week for Canada, but I don't think it can do enough to displace some of the bigger macro stories out there at the moment," she said, adding that downside support was found at $C0.9860 and resistance existed at C$0.9980. The two-year bond was up half a Canadian cent to yield 1.191 percent, while the benchmark 10-year bond fell 10 Canadian cents to yield 1.945 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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