Reuters: US Dollar Report: CANADA FX DEBT-C$ slides to 10-week low as rate hike pushed back

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

CANADA FX DEBT-C$ slides to 10-week low as rate hike pushed back Jan 24th 2013, 21:41 Thu Jan 24, 2013 4:41pm EST * C$ at C$1.0029 to US$, or $0.9971 * C$ at weakest level against euro since Feb. 27, 2012 * Rate hike delay, risk aversion hurts currency By Solarina Ho TORONTO, Jan 24 (Reuters) - The Canadian dollar softened to its weakest level in 10 weeks against the U.S. dollar on Thursday, a day after the Bank of Canada said an interest rate hike was less imminent. The currency has plunged more than 1 percent since the country's central bank said excess capacity in the economy, soft inflation and stabilizing household debt had combined to push any rate increase further away than it had expected. "Canada will still wear the Bank of Canada comment for a little bit. On the client side, there seems to be a feeling that it may not last too long. We have often seen it retrench back to the C$0.98-C$0.99 level," said Don Mikolich, executive director, foreign exchange sales, at CIBC World Markets. "It's had such a good run and we'll have another good run again. It's seeing some profit-taking and also some willingness to diversify out into dollars and some of the Commonwealth currencies." The Canadian dollar closed the North American trading session at C$1.0029 to the greenback, or $0.9971, compared with C$0.9990, or $1.0010, at Wednesday's North American close. The currency at one point hit C$1.0036, its weakest level since Nov. 16. Adam Cole, Royal Bank of Canada's London-based global head of foreign exchange strategy, said the continued weakness was also related to a feeling of global economic malaise. "The rally in dollar/Canada is as much about the markets being slightly negative for risk today as it is about Canada's domestic story," he said. The Canadian dollar underperformed a number of key currencies, and against the euro it touched its weakest level since Feb. 27, 2012. Cole said the Canadian dollar likely would soon bounce back above U.S. dollar parity again as risks abate in the euro zone and China shows further signs of improving growth. Investors will also closely follow the progress of U.S. politicians as they negotiate deals on spending cuts and debt expansion in coming months, he said. Canadian inflation figures due on Friday will be the next economic data in focus. "That will be another piece of evidence as to how things are unfolding. But with growth being marked down by the Bank of Canada and CPI seen as being fairly well behaved for a while, it would seem like rate hikes will be off in the horizon," Mikolich said. The price of the two-year bond rose half a Canadian cent to yield 1.124 percent, while the benchmark 10-year bond retreated 14 Canadian cents to yield 1.893 percent. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions