CANADA FX DEBT-C$ jumps to nearly 2-week high after soft U.S. data

Mon Jun 3, 2013 5:13pm EDT
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* C$ at C$1.0278 vs US$, or 97.30 U.S. cents
    * U.S. manufacturing activity contracts in May
    * Bond prices rise across the curve

    By Solarina Ho
    TORONTO, June 3 (Reuters) - The Canadian dollar rebounded
against its U.S. counterpart on Monday to its strongest level in
nearly two weeks after soft U.S. manufacturing data spurred
worries about the U.S. recovery and sent the U.S. dollar
plunging against a range of currencies.
    Manufacturing activity contracted in May to its lowest level
in nearly four years, the latest sign the U.S. economy is
encountering a soft patch.
    "The U.S. yields were really affected, which caused a
broad-based selloff of U.S. dollar and I think the market is
generally positioned long-USD/CAD," said David Bradley, director
of foreign exchange trading at Scotiabank.
    Bradley said after the currency broke through C$1.0310-15
level, stop-loss orders - placed to sell when a currency reaches
a certain price - were triggered.
    "We had a quick move down to C$1.0280. It's a pretty big
daily move for USD/CAD. We don't usually get ranges this big.
There was definitely a lack of liquidly in the market," said
    The Canadian currency finished the North American
session at C$1.0278 versus the U.S. dollar, or 97.30 U.S. cents,
nearly a cent stronger than Friday's finish at C$1.0368, or
96.45 U.S. cents.
    The Canadian dollar's performance was mixed against other
major currencies on Monday. This Friday's North American
employment and payrolls number will be the key data in an
otherwise quiet week.
    Prices for Canadian government debt were mostly higher
across the curve. The two-year bond rose 1.3 Canadian
cents to yield 1.074 percent, while the benchmark 10-year bond
 rose 12 Canadian cents to yield 2.054 percent.