CANADA FX DEBT-C$ gives up earlier gains from jobs as broader concerns weigh
* Canadian dollar at C$1.2750 or 78.43 U.S. cents * Bond prices lower across the maturity curve By Solarina Ho TORONTO, July 10 (Reuters) - The Canadian dollar softened against most of its key counterparts including the U.S. dollar on Friday, giving up earlier gains from better-than-forecast Canadian employment data, as expectation of further currency weakness pressured the loonie. The price of crude oil, an important Canadian export, also dipped slightly as concerns over demand offset improved investor sentiment over China and Greece. The Canadian dollar had been flat just prior to the labor force survey, which showed the economy had shed 6,400 jobs in June, less than the anticipated loss of 10,000 jobs. "There had been concern of a risk of a more significant decline that was even weaker than the consensus call. So this report has eased those concerns," said Paul Ferley, assistant chief economist at Royal Bank of Canada. At 9:48 a.m. EDT (1348 GMT), the Canadian dollar was trading at C$1.2750 to the greenback, or 78.43 U.S. cents, weaker than the Bank of Canada's official close of C$1.2707, or 78.70 U.S. cents. The loonie, which has been relatively rangebound this week after shedding nearly 4 percent since mid-June, traded between C$1.2663 and C$1.2754 so far in the session, touching its strongest level just after the jobs report. The labor data prompted markets to scale back bets on the likelihood the Bank of Canada will announce another 25 basis point rate cut as "insurance" to help stimulate economic growth. Canada's economy has been largely stagnant through the first half of the year. Many currency strategists still see the loonie heading toward C$1.28 to C$1.30 over the longer term, however, particularly as the Bank of Canada diverges with the U.S. Federal Reserve, which is expected to hike rates later this year. Meanwhile, markets are still focused on events overseas, with optimism growing that last-minute concessions by debt-laden Greece could result in a deal with its global creditors, and Chinese stocks, which had been plunging on panic selling, finding solid ground after a support measures from Beijing appeared to calm nervous investors. Canadian government bond prices were lower across the maturity curve, with the two-year price down 7.5 Canadian cents to yield 0.501 percent and the benchmark 10-year falling 82 Canadian cents to yield 1.687 percent. The Canada-U.S. two-year bond spread was -12.4 basis points, while the 10-year spread was -69.7 basis points. (Reporting by Solarina Ho Editing by W Simon)
© Thomson Reuters 2016 All rights reserved.