Canada Afternoon: C$ Cedes Early Gains To End Slightly Lower

Tue, Jun 16 2009, 19:43 GMT
http://www.djnewswires.com/eu

Canada Afternoon: C$ Cedes Early Gains To End Slightly Lower TORONTO (Dow Jones)--The Canadian dollar ended slightly lower after retreating from earlier gains Tuesday, reacting to a dip in oil prices and a global recovery from initial weakness for the U.S. dollar. The U.S. dollar was trading at C$1.1342 at 3:40 p.m. EDT (1940 GMT), from C$1.1230 at 8:00 a.m. EDT (1200 GMT) and C$1.1331 late Monday. The Canadian dollar rose alongside other currencies and traded as high as the C$1.1220 area in Tuesday's early going, as the U.S. dollar was set on the defensive globally by resurgent concerns about its ability to continue as the world's dominant reserve currency. The initial strength for the Canadian currency soon began to erode however, as North American stock markets floundered, oil prices backed off below $71 per barrel, and the U.S. dollar bounced off its lows of the day. All in all, the choppy and erratic movements of the past few sessions have many currency watchers looking towards a possible hiatus of range-trading for the early summer period, given the recent inability of the U.S. dollar-Canada pair to lock into a clear directional trend. Steve Butler, director of foreign exchange at Scotia Capital in Toronto, suggested that "the market is done for the time being with selling U.S. dollars, and there's more potential for the dollar to recover a little bit," with a possible move into the C$1.1500 area against the Canadian currency.
Chief currency strategist Shaun Osborne of TD Securities said the pattern of choppy recent dealings and an apparent lack of market conviction in either direction argue for the U.S.-Canada pair to settle into a near-term range between the C$1.1200 and C$1.1400 areas, with a risk of a wider "mid-year range over the next few weeks unless there is a move - one way or the other - with much more conviction in the next week or two."
These are the exchange rates at 3:40 p.m. EDT (1940 GMT), 8:00 a.m. EDT (1200 GMT), and late Monday.
USD/CAD 1.1342 1.1230 1.1331
EUR/CAD 1.5713 1.5623 1.5617 CAD/JPY 85.16 86.31 86.34
-By Paul Evans; Dow Jones Newswires; 416-306-2022; paulr.evans@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=nMZcyk2ZFp%2BAw7%2BkSZjUjQ%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
June 16, 2009 15:43 ET (19:43 GMT)
Copyright 2009 Dow Jones & Company, Inc.