CORRECTED-CANADA FX DEBT-C$ boosted by N.American data

Thu Oct 11, 2012 4:45pm EDT
 
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(Corrects Wednesday's closing price in third paragraph)
    * C$ at C$0.9778 to US$, or $1.0227
    * Data on Canadian trade deficit, U.S. jobless claims helps
    * Spain under pressure to seek bailout after S&P downgrade

    By Alastair Sharp
    TORONTO, Oct 11 (Reuters) - The Canadian dollar strengthened
to a session high against its U.S. counterpart on Thursday after
claims for U.S. jobless benefits fell to a multi-year low and
Canada reported a narrower-than-expected trade deficit.
    The resources-linked currency was also helped by positive
jobs data from fellow mining exporter Australia and by Standard
& Poor's ratings downgrade of Spain, which traders calculated
would push the country closer to requesting a bailout.
 
    At 9:31 a.m. (1331 GMT), the Canadian currency was
trading at C$0.9772 to the greenback, or $1.0233, compared to
its North American close at C$0.9807, or C$1.0197, on Wednesday.
    "The Spain downgrade caught a few people off guard," said
Steve Butler, director of foreign exchange trading at
Scotiabank. "But risk has come roaring back this morning and we
see stocks pointing in the right direction, and that's helping
the Canadian dollar."
    "We also had a positive surprise in Aussie jobs numbers 
overnight, so that's influencing the commodity space a little
bit and oil's up this morning. So all things good for Canada
seem to be in play this morning, and that's got Canada on its
front foot again after yesterday's pretty ugly selloff."
    The number of Americans filing new claims for unemployment
benefits fell sharply last week to the lowest level in more than
four and a half years, according U.S. government data on
Thursday that suggested improvement in the labor market of
Canada's main trading partner. 
    Canada's trade deficit fell more than expected in August as
imports declined, Statistics Canada data showed. 
    With investors shifting into riskier assets, Canadian
government bond prices fell. The two-year bond 
slipped 4 Canadian cents to yield 1.156 percent, while the
benchmark 10-year bond fell by 34 Canadian cents, to
yield 1.830 percent.

 (Editing by Leslie Adler)