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Canada’s dollar rebounded from the weakest level in almost two months as stocks rose from the day’s lows, crude oil climbed and traders suggested recent declines were overdone.
One Canadian dollar purchased 94.38 U.S. cents in Toronto after slipping to 93.74 cents, the least since July 6. The currency rose 0.2 percent to close at C$1.0596 per U.S. dollar. It closed yesterday at C$1.0615.
The loonie, as the currency is sometimes known, earlier dropped as risk aversion drove global stocks lower and weakened the outlook for currencies tied to growth. It’s down 0.8 percent this year. A faltering economic recovery means the chances for further Bank of Canada interest-rate increases in 2010 are diminishing, dimming the currency’s appeal.
“It feels a little as if the impetus for higher rates in Canada beyond September is perhaps fading a little more,” Shaun Osborne, chief currency strategist in Toronto at Toronto- Dominion Bank’s TD Securities unit, wrote in an instant message.
Derivatives markets are “pricing in lower probabilities of future interest-rate hikes yet again,” Olga Dadabayeva, an currency analyst at Canadian Imperial Bank of Commerce, wrote in a note to clients, citing a 45 percent chance of a 25 basis point increase at next month’s meeting, and 5 percent for the October meeting.
Read more:
http://www.bloomberg.com/
Canadian dollar under pressure
The Canadian dollar, often tied to the ebb and flow of the world economy, fell more than one per cent on Wednesday to C$1.0475 to the U.S. dollar, or 95.47 U.S. cents — its lowest level in nearly three weeks — as investors fled on worries about the overall economic outlook.
That fear rose this week after a gloomy U.S. Federal Reserve economic assessment shook investor confidence, while the Fed’s proposed measures to support the economy failed to satisfy world markets.
The Canadian dollar had risen steadily in the early part of this year, climbing above the U.S. dollar in early April, on optimism about recovery and prospects of higher Canadian interest rates. It had become an attractive alternative for global investors, given Canada’s relatively healthy economic fundamentals compared to United States and the euro zone.
But growing fears about the world economy have undermined much of that upward momentum, said Jeremy Stretch, head of foreign exchange strategy at CIBC World Markets in London.
Analysts said the Canadian dollar’s longer-term outlook would hinge on the ability of the United States and global economy to avoid a dreaded double-dip recession.
Read More:
http://www.vancouversun.com/
Getting Real
After one of the longest bull runs in Canada’s housing history, everyone from real estate agents and mortgage brokers to consumers should get set for a reality check:
* TSX: +25.20
* DOW: -21.42
* Dollar: -1.08c to 97.29 USD
* Oil: -1.31to $80.70 USD per barrel
* Gold: +6.20 $1203.40 per ounce
* Canadian 5 yr bond yields: +.20bps to 2.25.
The spread (based on the NEW MERIX 5 yr rate published rate of 4.19%) is above the comfort zone at 1.94.
| Term | Security | Bid
Yield |
Ask
Yield |
Yield
Change |
Bid
Price |
Ask
Price |
Price
Change |
|
|---|---|---|---|---|---|---|---|---|
| 3 Month | CTB 11/10/2010 | 0.680% | 0.660% | +0.000 | 99.829 | 99.834 | +0.002 | |
| 6 Month | CTB 02/03/2011 | 0.940% | 0.930% | +0.000 | 99.546 | 99.551 | +0.002 | |
| 1 Year | CTB 08/04/2011 | 1.160% | 1.140% | +0.010 | 98.872 | 98.891 | -0.006 | |
| 3 Year | CAN 2.000 09/01/2012 | 1.454% | 1.446% | +0.005 | 101.100 | 101.117 | -0.013 | |
| 5 Year | CAN 2.500 06/01/2015 | 2.257% | 2.249% | +0.001 | 101.099 | 101.133 | -0.003 | |
| 10 Year | CAN 3.500 06/01/2020 | 3.079% | 3.074% | +0.003 | 103.532 | 103.575 | -0.030 | |
| 30 Year | CAN 5.000 06/01/2037 | 3.656% | 3.651% | +0.002 | 122.835 | 122.928 | -0.035 | |
| Last Updated: 10 August 2010 10:21 ET | ||||||||
Benchmarks
Benchmark securities serve as a general indicator of the level and directional movement of the overall market. In the Canadian fixed income market, benchmark (also known as bellwether) securities are the current 3-month, 6-month, and 1 Year Government of Canada Treasury Bills and 2-year, 5-year, 10-year and 30-year Government of Canada Bonds. Benchmark Treasury Bills and Bonds are often used to determine the relative values of other fixed income securities.
About CanDeal
CanDeal is Canada’s leading multi-dealer-to-institutional investor online debt securities trading network (www.candeal.ca). CanDeal’s world class platform provides its participants with continuous access to the deepest pool of liquidity for fixed income products. The CanDeal electronic marketplace is open and available to all institutional investors and investment dealers across Canada. In addition to straight-through processing, online trade allocations, real time trade blotters and confirmations, the system also provides its users with superior compliance and audit functionality. In addition to supporting the entire trade cycle functionality, the CanDeal infrastructure also provides Market Data, Analytics and Compliance Reporting.
CANADA FX DEBT-C$ flat as investors ponder economy, eye Fed
By John McCrank
Canada’s dollar was flat against the U.S. dollar on Monday and was seen remaining rangebound as investors digest recent financial data and awaited clues on the state of the economic recovery.
The currency tumbled hard at the end of last week on the back of weak job reports out of Canada and the United States.
With no major economic data due on Monday, the currency would not likely be very active going into Tuesday’s policy meeting of the U.S. Federal Reserve Open Market Committee, said Eric Lascelles, chief Canada macro strategist at TD Securities.
“We are seeing some movements, but it seems to me that they are relatively mild,” he said.
“There is a chance this could be a ‘risk on’ day to a slight degree, which could ultimately be favorable to the Canadian dollar just based on how some of the international equities markets have fared … but it’s not clear to me that there is not much scope for an explosive market movement.”
Canadian bond prices were mostly lower, unwinding slightly after a big rally on Friday.
Read more:
http://www.reuters.com/