CANADA FX DEBT-C$ gains in quiet trade ahead of domestic jobs data
* C$ at C$1.0376, or 96.38 U.S. cents * Benefits from weaker U.S. dollar * Narrower trade deficit has little impact * Canada bond prices mixed By Alastair Sharp TORONTO, Aug 6 (Reuters) - The Canadian dollar rose slightly from a two-week low on Tuesday, boosted by the U.S. dollar's weakness versus the euro and yen, as traders looked ahead to Canadian jobs data due at the end of the week. "It was a very quiet session overall, coming off a long weekend and heading into the Canadian payroll number on Friday," said Blake Jespersen, a managing director for foreign exchange sales at BMO Capital Markets. Economists polled by Reuters expect that the Canadian economy added 10,000 jobs in July. Jespersen said a weaker-than-expected print could provide impetus for an implicit bias toward Canadian dollar weakness that would push the currency back above C$1.04 to the greenback for the first time since mid-July. "We continue to look for opportunities to sell the Canadian dollar on rallies and think QE tapering will be the story of the next three or four months and a broad U.S. dollar rally will come of that," he said, referring to a U.S. Federal Reserve plan to reduce its massive asset purchasing program. A report showing Canada's trade deficit narrowed a bit more than expected in June was mirrored by a similarly strong U.S trade report and had little impact on the currency pair. "We're still being driven so much by U.S. news rather than Canadian news, particularly as the trade figures are pretty close to expectations. (The data) didn't really give us much direction," said Adam Cole, global head of FX strategy at RBC Capital Markets in London. "We're waiting for Friday's employment numbers to really have any independent direction." The Canadian dollar ended the session at C$1.0376 versus the U.S. dollar, or 96.38 U.S. cents, up from Friday's North American session close of C$1.0390 versus the U.S. dollar, or 96.25 U.S. cents. The loonie, as the currency is known, ended at C$1.0359, or 96.53 U.S. cents, on Monday, when Canadian trading desks were closed for a national holiday. Early in Monday's session, the Canadian dollar hit a two-week low of C$1.0403, or 96.13 U.S. cents. The loonie has generally been on the defensive versus the greenback over the past year, most recently driven by signs the U.S. Federal Reserve will trim its stimulus. On Tuesday, the U.S. dollar slipped more broadly due in part to news of a surge in factory output in Britain and Germany, which gave life to the euro. Government bond prices were mixed across the maturity curve. The two-year bond was up half a Canadian cent to yield 1.154 percent, while the benchmark 10-year bond dropped 25 Canadian cents to yield 2.518 percent.
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