Bloomberg News

Canada’s Dollar Pares Gain as Investor Risk Aversion Rises

September 29, 2011

Sept. 29 (Bloomberg) -- Canada’s dollar pared gains against its U.S. counterpart as investors remain averse to adding riskier assets.

The Canadian currency was little changed at C$1.0333 per U.S. dollar at 12:22 p.m. in Toronto, compared with C$1.0335 yesterday. Earlier it touched C$1.0257. One Canadian dollar buys 96.78 U.S. cents.

“For the moment, risk aversion rules,” said John Curran, senior vice president at the online foreign exchange dealer CanadianForex Ltd. “We strengthened a little bit off the U.S. numbers that were better than expected, but that was short-lived because the greater concern is what’s going on in Europe, and that’s going to weigh on the Canadian dollar.”

A report showed the American economy grew faster than earlier estimated and jobless claims declined. The U.S. economy expanded at a 1.3 percent pace in the second quarter, and applications for jobless benefits dropped by 37,000 in the week ended Sept. 24 to 391,000, the fewest since April, according to government data. The U.S. is Canada’s largest trading partner.

Yields on benchmark 10-year debt rose four basis points to 2.23 percent as the price of the 3.25 percent securities fell 33 cents to C$108.79. Yields touched record lows of 1.994 percent on Sept. 23.

--Editor:

To contact the reporter for this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net.

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net


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