Reuters: US Dollar Report: CANADA FX DEBT-C$ holds steady against greenback before Fed news

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CANADA FX DEBT-C$ holds steady against greenback before Fed news Jul 30th 2013, 13:36 Tweet Share this Email Print Tue Jul 30, 2013 9:36am EDT * C$ at C$1.0263 or 97.44 U.S. cents * Market watches 2-day U.S. Fed meeting for stimulus policy move * Domestic data shows some inflation in industrial prices * C$ hits almost 3-year high vs A$ as Aussie rate cut expected By Alastair Sharp TORONTO, July 30 (Reuters) - The Canadian dollar held steady near a five-week high against its U.S. counterpart in early trade on Tuesday, as traders await a U.S. Federal Reserve pronouncement on monetary stimulus policy that could result in a wild swing in the currency pair. If the Fed pulls back aggressively on its monetary stimulus, C$1.05 could be reached by the week-end, while a limited Fed move could push the pair back to an equal footing, according to Adam Button, a currency analyst at ForexLive in Montreal. "The spring is coiled very tightly now and whichever way this C$1.0250/C$1.03 range breaks, you're going to see a powerful move," Button said. The loonie soared to an almost three-year high of 93.05 Canadian cents against its commodity-backed cousin, the Australian dollar, after that country's central bank governor fueled expectations of a cut in interest rates next week. The Bank of Canada, conversely, has held to a mild tightening bias for months, which could be aided by industrial data that showed a surprise rise. "New Bank of Canada Governor Poloz will want to take any opportunity to establish his inflation-fighting credibility," Button said, while cautioning that domestic data would be dwarfed by potentially explosive news out of a two-day U.S. Federal Reserve meeting on Tuesday and Wednesday. Producer prices rose 0.3 percent in June from May on the back of higher prices for autos and gasoline, while raw materials prices also gained. Analysts had expected no change in industrial prices. At 9:10 a.m. (1310 GMT) the Canadian dollar was trading at C$1.0263 to the greenback, or 97.44 U.S. cents, compared with C$1.0260, or 97.47 U.S. cents, at Monday's North American close. The two-year bond was off half a Canadian cent to yield 1.165 percent, while the benchmark 10-year bond rose 8 Canadian cents to yield 2.486 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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