Loonie firms vs U.S. dollar for 4th straight day
By Claire Sibonney
TORONTO (Reuters) - The Canadian dollar firmed against the U.S. dollar for a fourth straight day on Thursday as a Spanish bond sale saw decent demand and a liquidity move by major central banks raised hopes policymakers would step up action to tackle Europe's debt crisis.
Spain's government bond yields fell following the auction, a day after the world's six major central banks said they would lower the cost of existing dollar swap lines, and arrange bilateral swaps to provide liquidity for other currencies.
"We've had a good week, certainly not necessarily keeping up as well as some of the other currencies, but I think at the end of the day Canada has done well, and I would expect maybe a bit of consolidation today as we wait for the employment data out of both Canada and the U.S. tomorrow," said Steve Butler, director of foreign exchange trading at Scotia Capital.
Continued nervousness about the state of the U.S. economy has been weighing on Canada's currency, noted Butler.
Investor focus has now turned to a key European meeting on December 9 to see whether euro zone policymakers will follow through with measures to solve the crisis.
"The market still feels that the situation in Europe is still very tenuous ... they're making small strides but they still haven't really addressed the fundamental fact that there's still a mountain of debt that needs to be refinanced, and there's still a lot of concerns about what's going to happen, especially next year," added Butler.
At 8:09 a.m., the Canadian dollar was at C$1.0173 against the U.S. dollar, or 98.30 U.S. cents, up from Wednesday's North American session close at C$1.0203 against the U.S. dollar, or 98.01 U.S. cents.
Butler said parity was back in sight, with Canadian-dollar resistance now below C$1.01, and support rested near C$1.0240.
Canadian government bond prices were little changed across the curve. The two-year bond was up half a Canadian cent to yield 1.006 percent, while the 10-year bond eased 12 Canadian cents to yield 2.165 percent.
(Reporting by Claire Sibonney; editing by Jeffrey Benkoe)
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