RTRS: Loonie firms as oil rises, Canada data surprises
By Claire Sibonney
TORONTO (Reuters) - Canada's commodity-linked currency firmed against the U.S. dollar on Monday, as oil prices rose and domestic data showed a surprise climb in wholesale trade in October.
Oil prices climbed despite an initial flight-to-safety after the death of North Korean leader Kim Jong-il, while protests in Kazakhstan's oil producing region raised the specter of further supply disruption.
Meanwhile, Canadian wholesale trade rose unexpectedly in October, by 0.9 percent, with investment in machinery and equipment leading the way, according to Statistics Canada.
"Canadian data is expected to do a little bit better this week so you may see the Canadian dollar drift a little higher," said John Curran, senior vice president at CanadianForex, pointing to October retail sales on Wednesday and gross domestic product data on Friday.
"While this data may turn out to be short-term positive into year-end, the European woes are certain to take the spotlight again in the new year."
European officials will discuss later Monday a draft text of a new euro zone "fiscal compact" that could be finalized by the end of January.
And having agreed to offer 150 billion euros to the International Monetary Fund to raise its crisis-fighting capacity, officials will also consider the size of individual bilateral loans to the fund.
Risk sentiment was also still wobbly after Fitch's warning late Friday that it could downgrade France and six other euro zone countries, as it believes that a comprehensive solution to the region's debt crisis is "technically and politically beyond reach".
At 9:21 a.m. (1421 GMT), the Canadian dollar stood at C$1.0347 versus the greenback, or 96.65 U.S. cents, up modestly from Friday's North American session close at C$1.0370 against the U.S. dollar, or 96.43 U.S. cents.
Curran said he expected the Canadian dollar to trade between C$1.0250-C$1.0425 against the U.S. dollar the rest of the week.
Canadian government bond prices slipped across the curve, tracking U.S. Treasuries lower as risk aversion faded.
The two-year bond was down 4 cents to yield 0.864 percent, while the 10-year bond lost 22 cents to yield 1.891 percent. The 30-year bond retreated 25 Canadian cents to yield 2.465, after touching a record low yield on Friday.
