• Home
• /
• Business

C$ edges up ahead of GDP data

TORONTO - The Canadian dollar rose slightly against its U.S. counterpart on Friday as commodity prices strengthened and expectations Greece will soon receive emergency aid helped to ease fears about how Athens will pay its debts.

But trading was mostly range-bound as currency markets held their breath ahead of a reading of Canada¡¯s February gross domestic product and first-quarter U.S. figures, both due at 8:30 a.m. (1230 GMT).

¡°The Canadian GDP is bit a dated and it¡¯s the monthly so perhaps people will discount it but it¡¯s always has the ability to move things if the number comes in far off the expected 0.3 percent month over month,¡± said Sacha Tihanyi, a currency strategist at Scotia Capital.

For the U.S., the median Reuters forecast is for first-quarter growth of 3.4 percent, down from 5.6 percent growth in the fourth quarter of 2009.

At 7:56 a.m. (1156 GMT), the Canadian dollar CAD=D4> was at C$1.0047 to the U.S. dollar, or 99.53 U.S. cents, slightly higher than Thursday¡¯s finish at C$1.0054 to the U.S. dollar, or 99.46 U.S. cents. Earlier, the currency touched a high of C$1.0015 to the U.S. dollar, or 99.85 U.S. cents.

¡°The Canadian dollar is holding in quite well in recent sessions despite some weakness and now with easing of fears in Europe on the potential announcement of an austerity package and money being given to Greece, it¡¯s really the euro show today,¡± Tihanyi added.

The euro extended gains against the greenback as sources familiar with the Greece aid talks said officials were expected to announce details of the multi-billion-euro package by Monday.

In addition, oil prices rose towards $86 and gold hit a 2010 high, which also could boost Canada¡¯s commodity-linked currency.

Tihanyi said markets remain focused on the Canadian dollar¡¯s parity level against the U.S. currency.

¡°After the big move on Tuesday, we¡¯re just kind of making that ground back up and that¡¯s probably going to be constrained somewhat.¡±

Canada¡¯s dollar shot to one-for-one footing with the U.S. currency on Tuesday after the Bank of Canada abandoned its conditional commitment to keep rates steady until the end of June.

Canadian bond prices were mixed across the curve as U.S. Treasuries traded sideways ahead of the GDP data and relative calm in the euro zone debt market also keeping prices stable. US/¨ü

The two-year Canadian government bond was up 7 Canadian cents to C$99.165 to yield 1.965 percent, while the 10-year bond CA10YT=RR was 12 Canadian cents to C$98.120 to yield 3.726 percent.