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Bonds mixed,

dollar weaker

in Toronto

TORONTO: Canadian bonds closed mixed following a stronger U.S. market after the release of weaker-than-expected U.S. store sales for early August, dealers said on Tuesday.

"It's been quite a day, up and down," said Arve Bendiksrud, a fixed income analyst with Toronto dominion Securities. "It rallied quite strongly on the Johnson Redbook numbers, which were down".

Canada's 9.0 percent of 2025 rose C$0.19 at 102.47 to yield 8.763 percent against the U.S. 30-tear at 6.90 percent for a spread of 186 basis points, unchanged from Monday.

However treasuries lost ground at the front end. Canada's three-month cash T-bill fell to 6.58 percent against the U.S. three-month at 5.62 percent.

Johnson Redbook reported U.S. store sales fell one percent for the two weeks ended August 12.

DOLLAR

The Canadian dollar closed firmer in moderate flows, boosted by a stronger U.S. dollar, but its rise may be stemmed by mounting political uncertainty over a Quebec sovereignty referendum, analysts said.

The dollar rose to US$1.3589 (US$0.7359) from Monday's close of C$1.3614 (US$0.7345).

Despite a U.S. currency rally, the Canadian unit failed to match its rise due to a lack of investor interest. "It's really been in the sidelines today," an analyst said.

The U.S. dollar surged after a big drop in Japan's trade surplus for July and concerted intervention.

The Canadian dollar could be buoyed even further in Asian trading by strengthening of the U.S. unit against the German and Japanese currencies, a trader said. "Looking for a rally in dollar/mark, dollar/yen, which could push up the Canadian dollar."

On the other hand, the dollar's advance may be stemmed by increasing political uncertainty in Canada.-Reuter