Reuters: US Dollar Report: CANADA FX DEBT-C$ pushed and pulled by U.S. data

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CANADA FX DEBT-C$ pushed and pulled by U.S. data Apr 26th 2013, 13:13 Tweet Share this Email Print Fri Apr 26, 2013 9:13am EDT * C$ at C$1.0206 vs US$, or 97.98 U.S. cents * U.S. Q1 GDP data shows growth less than expected By Alastair Sharp TORONTO, April 26 (Reuters) - The Canadian dollar was little changed versus the U.S. dollar in early trade on Friday after data showed U.S. economic growth sped up in the first quarter but not by as much as had been expected. The loonie, as the currency is colloquially known, is on track to notch a weekly gain of 0.6 percent. It traded in a tight range to start the session after data that presents opposing ramifications for the Canadian currency. U.S. economic growth regained speed in the first quarter, but not as much as expected, which could heighten fears the already weakening economy could struggle to handle deep government spending cuts and higher taxes. "Dollar/Canada is kind of caught between it being a soft number which would be U.S. dollar negative, but also a soft number is slightly negative for risk, and that would typically be Canadian dollar negative," said Adam Cole, global head of foreign exchange strategy at Royal Bank of Canada. At 8:58 a.m. (1258 GMT) the Canadian dollar was trading at C$1.0206 to the greenback, or 97.98 U.S. cents, only marginally stronger than Thursday's North American close of C$1.0209, or 97.95 U.S. cents. The loonie did at one point break to its strongest level since April 15, before paring those gains. RBC's Cole said that in the next three to six months he expects the loonie to weaken to C$1.05 based on the country's external imbalance and the reluctance of the Bank of Canada to raise rates. For next week, he said currency investors will be looking for news out of the U.S. Federal Reserve's monetary policy meeting mid-week, Canadian GDP data on Thursday, and a U.S. payrolls report on Friday. Canada also reports jobs data next Friday. The price of Canadian government debt rose across the curve, with the two-year bond up 2-1/2 Canadian cents to yield 0.934 percent, while the benchmark 10-year bond rose 31 Canadian cents to yield 1.709 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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