CANADA FX DEBT-C$ awaits jobs data, further weakness eyed

Thu Aug 6, 2015 9:32am EDT
 
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* Canadian dollar at C$1.3172, or 75.92 U.S. cents
    * Bond prices slightly lower across the maturity curve

    By Alastair Sharp
    TORONTO, Aug 6 (Reuters) - The Canadian dollar was slightly
stronger versus its U.S. counterpart on Thursday, with trading
muted ahead of both Canadian and U.S. employment reports due on
Friday.
    A strong print on the U.S. jobs data would bolster the
assumption that the U.S. Federal Reserve will hike rates
starting in September and make the Canadian dollar less
attractive.
    "For me, the risk is that we get a more positive U.S.
employment report, on the basis of the early indications we've
had in the last few days," said Adam Cole, global head of FX
strategy at Royal Bank of Canada.
    The number of Americans filing new applications for
unemployment benefits rose less than expected last week. 
 
    At 9:05 a.m. ET (1305 GMT), the Canadian dollar was
trading at C$1.3172 to the greenback, or 75.92 U.S. cents,
compared to Wednesday's close of C$1.3188, or 75.83 U.S. cents.
    Cole said a strong U.S. non-farm payrolls figure on Friday
would eclipse the Canadian data and could push the currency pair
through C$1.33. The last time the loonie was that weak was in
2004.
    Economists expect the U.S. economy to have added 223,000
jobs in July and for Canada to have added 5,000.
    Canadian government bond prices were slightly lower across
the maturity curve, with the two-year price down 1.5
Canadian cents to yield 0.446 percent and the benchmark 10-year
 off 6 Canadian cents to yield 1.480 percent.
    The Canada-U.S. two-year bond spread was -27.1 basis points,
while the 10-year spread was -78.1 basis points.
    The Canadian currency was also hurt by oil, a major Canadian
export, slipping to multi-month lows amid a persistent global
supply glut and little sign of a reduction in production. 
    U.S. crude prices were down 1.1 percent to $44.67,
while Brent crude lost 0.5 percent to $49.35.
        

 (Editing by Meredith Mazzilli)