950817

Dollar firm,

bond higher

in Canada

TORONTO: The Canadian dollar firmed moderately in quiet trading and may go slightly higher in overnight trading, boosted by the US unit, dealers said on Wednesday.

It firmed to C$1.3583 (US$0.7362) from Tuesday's close of C$1.3594 (US$0.7356).

Investors have been more interested in the big dollar and other currencies, especially after recent intervention by four major government banks, including those of the US and Japan. "The Canadian dollar's on the sidelines," said Julius Gryguc, Bendix Foreign Exchange vice-president. "Nobody's paying much attention to it."

Tonight in Asian market the Canadian dollar may be boosted further to 1.3570 by a rising US unit, an unnamed dealer said. "There might be a potential that we could try to move down and retest 3570, 75," he said.

On the crosses, the Canadian dollar rose to 1.0911 marks from 1.0847 marks and firmed to 72.12 yen from 71.15 yen.

Canadian bonds closed modestly higher amid short-covering and Canadian and US account buying which accelerated after a five-year government bond auction met good demand, dealers said.

The C$2.6 billion of 7.5 percent bonds maturing on September 1, 2000 sold for an average yield of 7.996 percent at a price of 97.988. The high and low yields were 8.000 and 7.995 percent respectively.

Canada's 9.0 percent of 2025 gained C$0.26 to 102.77 to yield 8.735 percent against the US 30-year at 6.89 percent for a spread of 185 basis points.

The market saw two Canadian corporate issues. Tembec Finance Corp, a unit of Tembec Inc, issued US$250 million in 9.875 percent senior notes due September 30, 2005. Also, Falconbridge Ltd issued US$200 million in 7.375 percent debentures due September 1, 2005.

Among other Canadian prices, the 9.0 percent of 2004 was up C$0.29 at 104.14 to yield 8.347 percent against the US 10-year at 6.54 percent for a spread of 181 basis points.

At the front end, Canada's three-month cash T-bill closed at 6.52 percent against the US three-month at 5.60 percent.