RTRS: Canadian dollar hits seven-and-half month low vs. euro; softer vs. dollar
By Solarina Ho
TORONTO (Reuters) - The Canadian dollar was weaker against its U.S. counterpart on Wednesday, trending with other commodity currencies, as many investors looked to book profits ahead of the holidays following a recent rally to two-month highs.
Canada's dollar ran counter to world shares, which hit 17-month highs, and the surging euro. Investor hopes grew for a year-end budget deal in the United States and for further monetary stimulus from the Bank of Japan.
"I think this is probably some profit-taking heading into the holidays, because the market was quite short USD/CAD. Definitely some technical levels have broken on some of the Canada crosses ... It's had a very decent rally," said David Bradley, director of foreign exchange trading at Scotiabank.
"It's been really strange, the way its traded recently ... Most correlations have broken down."
At 9:07 a.m. (1407 GMT), the Canadian dollar stood at C$0.9873 versus the U.S. dollar, or $1.0129, weaker than Tuesday's North American finish at C$0.9857, or $1.0145.
Bradley said the currency's strength has stalled around the C$0.9825 level against the U.S. dollar, and noted a lot of interest to sell toward C$0.9882.
Against the euro, it fell to its lowest level since May 1 at C$1.3131, or .7616 euros.
The currency did not react to a smattering of North American data, including Canadian wholesale trade, which expanded by a stronger-than-expected 0.9 percent in October.
Canada was underperforming most major currencies except other commodities-linked currencies and the Japanese yen. It touched its weakest level against the euro since May 1.
A key business survey in Germany suggested that Europe's biggest economy was likely to bounce back quickly from its slowdown. The growing confidence in the outlook lifted the euro to a 16-month high against the yen and an 8-1/2 month peak versus the U.S. dollar.
Canadian government bond prices were lower across the curve. The two-year bond was down 1 Canadian cent, yielding 1.158 percent, while the benchmark 10-year bond shed 20 Canadian cents to yield 1.862 percent.
(Reporting by Solarina Ho; Editing by Nick Zieminski)
