Reuters: US Dollar Report: CANADA FX DEBT-C$ pulls back as Canada's trade deficit widens

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CANADA FX DEBT-C$ pulls back as Canada's trade deficit widens Jun 4th 2013, 13:49 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Tue Jun 4, 2013 9:49am EDT * C$ at C$1.0329 vs US$, or 96.81 U.S. cents * Canadian trade deficit jumps in April * U.S. trade deficit widens less than expected in April * Oil prices weigh on worries over U.S. demand By Solarina Ho TORONTO, June 4 (Reuters) - The Canadian dollar retreated against the U.S. dollar on Tuesday as data that showed the Canadian trade deficit widening in April and weaker commodity prices kept the currency under pressure. Canada's trade deficit in April jumped as imports hit a record high and exports eased slightly, the latest indication that exporters' woes are crimping the economy, Statistics Canada data indicated. "Canada was able to outperform for a while, and now it's starting to look more in line with the U.S. in terms of its economic activity. If anything, maybe underperform. I think that has weighed on the Canadian dollar," said David Tulk, chief Canada macro strategist at TD Securities. At 9:25 a.m. (1322 GMT), the Canadian dollar traded at C$1.0329 versus the U.S. dollar, or 96.81 U.S. cents, softer than Monday's finish at C$1.0278, or 97.30 U.S. cents. The U.S. trade deficit widened less than expected in April, though the widening in the so-called real trade deficit could prompt economists to lower their already low estimates for second-quarter gross domestic product. Higher taxes and government spending cuts have curbed consumer spending in the United States and weighed on the country's manufacturing activity. Oil prices slipped as weak U.S. manufacturing numbers from Monday deepened worries about demand growth in the world's biggest oil consumer. Canada's dollar, which was mostly weaker against other currencies except for its commodities counterparts - the Australian and New Zealand dollars, was expected to keep mostly within the day's highs and lows of C$1.0333 and C$1.0278, Tulk said. Prices for Canadian government debt were mostly lower across the maturity curve. The two-year bond eased 1.5 Canadian cents to yield 1.079 percent, while the benchmark 10-year bond fell 24 Canadian cents to yield 2.079 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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