Reuters: US Dollar Report: CANADA FX DEBT-C$ firms, eyes US$ parity ahead of Fed policy decision

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CANADA FX DEBT-C$ firms, eyes US$ parity ahead of Fed policy decision May 1st 2013, 13:25 Tweet Share this Email Print Wed May 1, 2013 9:25am EDT * C$ at C$1.0076 vs US$, or 99.25 U.S. cents, * Fed decision eyed; dovish tone expected * Bonds higher across the curve By Alastair Sharp TORONTO, May 1 (Reuters) - The Canadian dollar was pushing towards equal value with its U.S. counterpart on Wednesday, looking for its sixth straight day of gains, ahead of a U.S. Federal Reserve policy decision which currency strategists expect will show dovish tendencies. Positive domestic data has also helped the loonie, as Canada's currency is colloquially known, and forced some investors to cover their short positions. A short position is a bet that an asset will drop in value. "We have a mixed bag of things, we have better fundamental data, so retail sales and GDP helped," said Camilla Sutton, chief currency strategist at Scotiabank. "We also have the pushing out of expectations for a tapering of QE in the U.S, so a broadly weaker U.S. dollar, that's helped." Retail sales data for February surprised market participants last week, while stronger-than-expected gross domestic product data for February released on Tuesday backed up the view of a rebound. At 9:05 a.m. (1305 GMT) the Canadian dollar was trading at C$1.0076 to the greenback, or 99.25 U.S. cents, much where it closed Tuesday's North American session. The currency has gained almost 2 percent in the last week. "We trade close to parity, and we really struggle to move sustainably or substantially away from it," Scotiabank's Sutton said. "For every positive factor there's an offsetting negative factor." Prices for Canadian government debt were higher across the curve, with the two-year bond up a third of a Canadian cent to yield 0.921 percent and the benchmark 10-year bond rising 14 Canadian cents to yield 1.684 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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