By Jennifer Kwan
TORONTO, Oct 23 (Reuters) - The Canadian dollar sank further against the greenback on Friday as warnings from the Bank of Canada that the currency's strength was a risk to economic growth weighed on investor sentiment.
On Thursday, Governor Mark Carney said in a news conference that intervention in currency markets was an option but also stressed the bank's main concern was controlling inflation.
That followed comments earlier in the week by the central bank that the surging currency was undermining Canada's economic recovery, which killed thoughts of an early interest rate hike and raised some concerns the bank might signal it would intervene in foreign exchange markets.
The comments sent Canada's dollar to a low of C$1.0546 to the U.S. dollar on Friday, or 94.82 U.S. cents. It recovered some of the losses to finish at at C$1.0519 to the U.S. dollar, or 95.07 U.S. cents, down from C$1.0478 to the U.S. dollar, or 95.44 U.S. cents, at Thursday's close.
The Canadian dollar was down 1.3 percent for the week.
'The real driver was certainly the Bank of Canada,' said said Camilla Sutton, currency strategist at Scotia Capital.
Also tugging the currency lower was weakness in the price of oil, a key Canadian export, which fell to around $80 a barrel, while gold prices were also weaker.
'Commodity currencies are generally a little bit weaker and that's driven off equities being weaker,' Sutton said.
Stock market on both side of the border sank on Friday. Toronto stocks were dragged lower by weaker oil prices, profit-taking and a poor outlook from fertilizer producer Agrium Inc. In the United States, the Dow slipped below the 10,000 mark, pressured by weak results from industrial companies.
BONDS WEAKER
Domestic bond prices, with no Canadian data to influence a move, were pinned lower across the curve alongside the bigger U.S. Treasury market, said Sheldon Dong, fixed income analyst, at TD Waterhouse Private Investment.
U.S. Treasury debt prices eased on Friday as investors maneuvered to cut prices ahead of next week's record-large wave of government notes supply.
'There's going to be focus on whether there's enough buying support for the record amounts of debt they're going to issue,' said Dong.
The two-year bond fell 4 Canadian cents to C$99.45 to yield 1.518 percent, while the 10-year bond fell 35 Canadian cents to C$102.00 to yield 3.502 percent.
Canadian bonds mostly outperformed comparable U.S. issues. The Canadian 2-year yield was about 50 basis points above its U.S. counterpart, from 55 basis points on Thursday.
(Reporting by Jennifer Kwan; editing by Rob Wilson) ============================================================== FOR CANADIAN MARKETS NEWS, CLICK ON CODES IN BRACKETS: Canadian dollar and bonds report................... TSX market report........................................ Headlines from global forex markets .................. Bank of Canada stories................................... Bank of Canada weekly t-bill auction.................. Bank of Canada securities auctions.................... Bank of Canada interest rate story.................... Reuters monthly Canadian dollar poll.. Canadian interest rate poll.......................... Reuters G7 quarterly economy poll................... Weekly economic data poll..................... Reuters global stocks poll (Canada)... Top News: Canada .................................... Today in Canada..................................... Canadian debt and money news ................... FOR CANADIAN MARKETS DATA, CLICK ON CODES IN BRACKETS: Real-time Canadian economic RICS...................... Canadian dollar quote........................... Canadian bonds quote................. Canadian money market quote.................. Canada-Treasury spread rates....................... Canadian Debt and Forex speed guide........... Canadian Equities speed guide...................... S&P/TSX Composite index ............................. FOR MAIN GLOBAL MARKET DATA AND MARKET REPORTS: FTSE Eurotop 300 ..... European report ....... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. Frankfurt market stories CAC-40................. Paris market stories... World Indices..................................... Foreign exchange...................................... Oil.................................................... US Treasuries......................................... International bonds................................... Gold....................................... or CRB index of commodity futures........................ All spots Tokyo spots Europe spots Volatilities Tokyo Forex market info from BOJ World central bank news Economic Forecasts... Official rates... Forex Diary....... Top events........ Diaries........... Diaries Index........ Press Digests..... Polls on G7 economies.. Keywords: MARKETS CANADA/DOLLAR BONDS (jennifer.kwan@thomsonreuters.com; +1 416 941 8178; Reuters Messaging: jennifer.kwan.reuters.net@reuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
TORONTO, Oct 23 (Reuters) - The Canadian dollar sank further against the greenback on Friday as warnings from the Bank of Canada that the currency's strength was a risk to economic growth weighed on investor sentiment.
On Thursday, Governor Mark Carney said in a news conference that intervention in currency markets was an option but also stressed the bank's main concern was controlling inflation.
That followed comments earlier in the week by the central bank that the surging currency was undermining Canada's economic recovery, which killed thoughts of an early interest rate hike and raised some concerns the bank might signal it would intervene in foreign exchange markets.
The comments sent Canada's dollar to a low of C$1.0546 to the U.S. dollar on Friday, or 94.82 U.S. cents. It recovered some of the losses to finish at at C$1.0519 to the U.S. dollar, or 95.07 U.S. cents, down from C$1.0478 to the U.S. dollar, or 95.44 U.S. cents, at Thursday's close.
The Canadian dollar was down 1.3 percent for the week.
'The real driver was certainly the Bank of Canada,' said said Camilla Sutton, currency strategist at Scotia Capital.
Also tugging the currency lower was weakness in the price of oil, a key Canadian export, which fell to around $80 a barrel, while gold prices were also weaker.
'Commodity currencies are generally a little bit weaker and that's driven off equities being weaker,' Sutton said.
Stock market on both side of the border sank on Friday. Toronto stocks were dragged lower by weaker oil prices, profit-taking and a poor outlook from fertilizer producer Agrium Inc. In the United States, the Dow slipped below the 10,000 mark, pressured by weak results from industrial companies.
BONDS WEAKER
Domestic bond prices, with no Canadian data to influence a move, were pinned lower across the curve alongside the bigger U.S. Treasury market, said Sheldon Dong, fixed income analyst, at TD Waterhouse Private Investment.
U.S. Treasury debt prices eased on Friday as investors maneuvered to cut prices ahead of next week's record-large wave of government notes supply.
'There's going to be focus on whether there's enough buying support for the record amounts of debt they're going to issue,' said Dong.
The two-year bond fell 4 Canadian cents to C$99.45 to yield 1.518 percent, while the 10-year bond fell 35 Canadian cents to C$102.00 to yield 3.502 percent.
Canadian bonds mostly outperformed comparable U.S. issues. The Canadian 2-year yield was about 50 basis points above its U.S. counterpart, from 55 basis points on Thursday.
(Reporting by Jennifer Kwan; editing by Rob Wilson) ============================================================== FOR CANADIAN MARKETS NEWS, CLICK ON CODES IN BRACKETS: Canadian dollar and bonds report................... TSX market report........................................ Headlines from global forex markets .................. Bank of Canada stories................................... Bank of Canada weekly t-bill auction.................. Bank of Canada securities auctions.................... Bank of Canada interest rate story.................... Reuters monthly Canadian dollar poll.. Canadian interest rate poll.......................... Reuters G7 quarterly economy poll................... Weekly economic data poll..................... Reuters global stocks poll (Canada)... Top News: Canada .................................... Today in Canada..................................... Canadian debt and money news ................... FOR CANADIAN MARKETS DATA, CLICK ON CODES IN BRACKETS: Real-time Canadian economic RICS...................... Canadian dollar quote........................... Canadian bonds quote................. Canadian money market quote.................. Canada-Treasury spread rates....................... Canadian Debt and Forex speed guide........... Canadian Equities speed guide...................... S&P/TSX Composite index ............................. FOR MAIN GLOBAL MARKET DATA AND MARKET REPORTS: FTSE Eurotop 300 ..... European report ....... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. Frankfurt market stories CAC-40................. Paris market stories... World Indices..................................... Foreign exchange...................................... Oil.................................................... US Treasuries......................................... International bonds................................... Gold....................................... or CRB index of commodity futures........................ All spots Tokyo spots Europe spots Volatilities Tokyo Forex market info from BOJ World central bank news Economic Forecasts... Official rates... Forex Diary....... Top events........ Diaries........... Diaries Index........ Press Digests..... Polls on G7 economies.. Keywords: MARKETS CANADA/DOLLAR BONDS (jennifer.kwan@thomsonreuters.com; +1 416 941 8178; Reuters Messaging: jennifer.kwan.reuters.net@reuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.