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CANADA FX DEBT-C$ flat as greenback gains on rate expectations

Published 2015-09-25, 04:29 p/m
© Reuters.  CANADA FX DEBT-C$ flat as greenback gains on rate expectations
CA2YT=RR
-
CA10YT=RR
-

* Canadian dollar at C$1.3316 or 75.10 U.S. cents
* Bond prices lower across the maturity curve

(Updates prices, adds quotes, details)
TORONTO/OTTAWA, Sept 25 (Reuters) - The Canadian dollar was
little changed on Friday, leaving it near 11-year lows, as
investors favored its U.S. counterpart after the head of the
Federal Reserve said the U.S. central bank was on track to raise
interest rates this year.
A healthy upward revision to U.S. economic growth in the
second quarter added to the case for a hike in rates in the
coming months and increased appetite for the U.S. dollar.
The upbeat data followed a speech late on Thursday by Fed
Chair Janet Yellen who said the Fed was on track to raise rates
this year for the first time in nearly a decade.
Market participants have been hoping for more clarity on
when the Fed may resume raising rates, particularly as worries
over global growth remain volatile and dominate headlines.
The situation in the United States is in contrast to that in
Canada, where the economy was in mild recession in the first
half of 2015 and the Bank of Canada has cut rates twice this
year to combat the shock from cheaper oil prices.
The Canadian dollar had briefly touched an 11-year low on
Thursday before recovering but it was not able to make much
headway on Friday.
"For the most part we're seeing that the Canadian dollar
can't really hang onto any of its rallies," said Rahim Madhavji,
president at KnightsbridgeFX.com in Toronto.
"It doesn't have a strong catalyst going for it in the short
term."
The Canadian dollar ended the North American
session at C$1.3316 to the greenback, or 75.10 U.S. cents,
nearly flat compared to the Bank of Canada's official close of
1.3318, or 75.09 U.S. cents.
Next week's focus will be on the monthly Canadian gross
domestic product report, with economists forecasting a 0.2
percent pick-up in July. That would support the view that growth
regained momentum in the third quarter.
Still, one data point is unlikely to change the view on the
Canadian dollar, said Madhavji.
"You're going to need to see a sustained, continuous
surprise in Canada for the sentiment to change," he said.
Canadian government bond prices were lower across the
maturity curve, with the two-year CA2YT=RR price down 7.5
Canadian cents to yield 0.546 percent and the benchmark 10-year
CA10YT=RR falling 56 Canadian cents to yield 1.529 percent.

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