CANADA FX DEBT-C$ picks up on surprisingly strong U.S. data

Thu Jan 17, 2013 4:34pm EST
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* C$ ends stronger at C$0.9857 vs US$, or $1.0145

* Bond prices slide across the curve

By Claire Sibonney

TORONTO, Jan 17 (Reuters) - The Canadian dollar edged up slightly against the U.S. currency on Thursday after encouraging U.S. economic data pointed to a recovery in housing and employment in Canada's largest export market.

In the United States, jobless claims dropped to a five-year low, while housing starts accelerated to their fastest pace in four years.

The reports showed the U.S. economy was weathering an uncertain fiscal environment unexpectedly well, and trumped the impact of domestic data that showed foreign investment in Canadian securities more than halved to a six-month low in November.

"The Canadian data if anything should have made the currency weaker to some extent ... but it was definitely overshadowed by the firmer U.S. data," said Mark Chandler, head of fixed income and currency strategy at RBC Capital Markets. "At least for now that sort of risk-on appetite has been a good thing for the Canadian dollar."

The Canadian dollar ended the North American session at C$0.9857 against the U.S. dollar, or $1.0145, stronger than Wednesday's North American session close at C$0.9861, or $1.0141. However, it still remained fairly range-bound, trading in a narrow band between C$0.9843-87.   Continued...