CANADA FX DEBT-C$ slides vs US$, but outperforms others despite drop in crude
(Updates with additional details, fresh comment, closing figure) * Canadian dollar at C$1.1426, or 87.52 U.S. cents * Bond prices were mostly higher across the maturity curve By Solarina Ho TORONTO, Nov 6 (Reuters) - The Canadian dollar weakened on Thursday against the greenback, which strengthened on positive U.S. jobless claims data and dovish comments by the European Central Bank president, but outperformed most of its other currency counterparts. In Canada, data showed the value of building permits beat expectations, jumping 12.7 percent in September and recovering some of the previous month's drop, but the impact of the positive data on the currency was tempered by external pressures. "When the U.S. dollar is on fire, it's going to gain against everything," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. "But actually, CAD is performing better than its peers and better than you might expect given what's going in other related assets." Oil markets retreated on worries about high supplies and a strong greenback, which also weighed on the U.S.-priced crude. The Canadian dollar, which touched a five-year low in the previous session before rebounding, closed at C$1.1426 to the greenback, or 87.52 U.S. cents, weaker than Wednesday's close of C$1.1389, or 87.80 U.S. cents. It was the second-strongest performer among the G10 currencies, however, despite oil prices and substantially higher U.S. bond yields, Anderson noted. Earlier in the session, ECB President Mario Draghi, playing down the extent of discord on the governing council, insisted he had unanimous agreement behind his monthly statement on the potential future size of the ECB's balance sheet and the possibility of more measures to fight deflation. Euro zone inflation remains far below the central bank's target of just under 2 percent, underscoring the difficulty of meeting the ECB's target in a stagnating economy. "(Draghi's comments) put a lot of downward pressure on the euro, which by extension has boosted the American dollar," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. In the United States, the number of Americans filing new claims for unemployment benefits fell more than expected last week. The data comes on the heels of another report on Wednesday that showed U.S. private employers created the most new jobs since June, exceeding forecasts. Smith said market participants were also positioning themselves on expectations that the U.S. non-farm payroll figures due on Friday will be robust. Canada's monthly jobs data is also due on Friday. BMO's Anderson said the Canadian dollar could break C$1.15 if the U.S. employment report is strong and Canada's is weak. "Absent of that, I don't expect the jobs report as big of movers as they have been earlier this year," he said, noting the volatility in the Canadian data and the Fed's broader focus on factors that could influence its monetary policy. Canadian government bond prices were mostly higher across the maturity curve, with the two-year down 5 Canadian cents to yield 1.031 percent and the benchmark 10-year off 31 Canadian cents to yield 2.086 percent. (Editing by Bernadette Baum and Cynthia Osterman)
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