CANADA FX DEBT-C$ rallies as greenback softens; U.S. jobs data in focus
(Adds fresh strategist comment, closing figures, details) * Canadian dollar at C$1.3255 or 75.44 U.S. cents * Bond prices mostly lower across the maturity curve By Solarina Ho TORONTO, Oct 1 (Reuters) - The Canadian dollar extended gains against a weaker U.S. dollar on Thursday, as market attention shifted away from quarter-end positioning to broader themes including when the U.S. Federal Reserve will finally make its interest rate move. The currency had softened to an 11-year intraday low of C$1.3457 against the greenback earlier this week, before bouncing higher following data that show faster-than-expected economic growth in Canada, and month- and quarter-end settlements. "I think there was a lot of interest to buy (U.S.) dollars across the board. ... As soon as the (month-end) fixing was out of the way yesterday, USD/CAD traded one direction lower," said David Bradley, director of foreign exchange trading at Scotiabank. The Canadian dollar finished at C$1.3255 to the greenback, or 75.44 U.S. cents, sharply firmer than the Bank of Canada's official close of C$1.3345, or 74.93 U.S. cents on Wednesday. The loonie, which was outperforming nearly all of its key currency counterparts, hit C$1.3219 at one point during the session, but pared gains as trading turned choppy in the equities and crude markets. Crude oil, a major Canadian export, surged earlier in part on worries about potential damage to oil installations from a hurricane headed for the U.S. East Coast, but turned flat as those worries faded. Plunging crude prices have dragged the loonie down sharply over the last year and remains a significant driver for the currency. The U.S. dollar, which pulled back after data showed the pace of growth in the U.S. manufacturing sector remained at or near levels not seen since 2013, also helped the Canadian dollar. The figures indicated that a softening global economy could complicate the Fed's plans to hike rates. U.S. labor market data, due at 8:30 a.m. EDT, will be the main attraction on Friday. Canadian government bond prices were generally lower across the maturity curve, with the two-year price up 1.5 Canadian cents to yield 0.527 percent and the benchmark 10-year up 4 Canadian cents to yield 1.427 percent. The Canada-U.S. two-year bond spread was -12.2 basis points, while the 10-year spread was -61.5 basis points. (Reporting by Solarina Ho; Editing by W Simon and Diane Craft)
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