CANADA FX DEBT-C$ weaker as trade picture darkens, euro jumps
* Canadian dollar at C$1.2472, or 80.18 U.S. cents * Bond prices lower across the maturity curve TORONTO, June 3 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Wednesday, as the major trade partners produced divergent data, and hit its weakest level in three months versus the euro. Canada posted a near-record trade deficit in April, with both imports and exports falling, while the U.S. trade gap shrunk by its largest amount since early 2009. At 9:23 a.m. ET (1323 GMT), the Canadian dollar was trading at C$1.2472 to the greenback, or 80.18 U.S. cents, weaker than the Bank of Canada's official close of C$1.2408, or 80.59 U.S. cents, on Tuesday. Currency markets were dominated by euro-centric trading however, as the common currency jumped anew after the European Central Bank raised its inflation target. "I'm not concerned that the Canadian dollar is going to collapse, and I don't have any belief that the loonie's going to soar here," said Brad Schruder, director of foreign exchange sales at BMO Capital Markets. "It's really going to be about the next major pieces of data." That next catalyst may come on Friday, when both Canada and the United States report employment data for May. "Many in the market that think we're just one really strong job non-farm print away from certainty around July or at the latest September for a (U.S.) rate hike," Schruder said. * U.S. crude prices were down 1.1 percent at $60.59, while Brent crude lost 1 percent to $64.81. * The Canadian dollar should trade between C$1.2450 and C$1.2550 going into Friday's job numbers, Schruder said. * Canadian government bond prices were lower across the maturity curve, with the two-year down half a Canadian cent to yield 0.596 percent and the benchmark 10-year falling 41 Canadian cents to yield 1.754 percent. * The Canada-U.S. two-year bond spread was -7.7 basis points, while the 10-year spread was -56.8 basis points. (Reporting by Alastair Sharp; Editing by Lisa Von Ahn)
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