CANADA FX DEBT-Lower oil, weak domestic data weigh on C$

Fri Dec 4, 2015 4:38pm EST
 
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(Adds trader comment, updates prices)
    * Canadian dollar at C$1.3377, or 74.76 U.S. cents
    * Bond prices higher across the maturity curve

    By Alastair Sharp
    TORONTO, Dec 4 (Reuters) - The Canadian dollar weakened
against the U.S. dollar on Friday after contrasting U.S. and
Canadian employment data, while crude oil fell as OPEC maintains
its policy of pumping near-record volumes of oil despite a
supply glut.
    But the limited nature of the weakening and apparent
rejection of a move above C$1.34 confounded market participants
who said the day's developments suggested a steeper loss was
deserved for the loonie.
    "Combine the jobs number with crude being at $40 you would
think the Canadian dollar should be weaker," said David Bradley,
director of foreign exchange trading at Scotiabank.
    Canada shed more jobs than expected in November, while
exports tumbled in October, suggesting the economy was off to a
weak start in the final quarter of 2015 after just recently
emerging from a mild recession. 
    Meanwhile, a sturdy increase in U.S. employment most likely
paved the way for the Federal Reserve to raise interest rates
this month for the first time in nearly a decade. 
    To top it off, prices for crude oil, a major Canadian
export, fell after news the Organization of the Petroleum
Exporting Countries planned to maintain its production near
record highs despite depressed prices, as the producer group
continued to guard its share of an oversupplied market.
 
    The Canadian dollar ended the day trading at
C$1.3377 to the greenback, or 74.76 U.S. cents, weaker than
Thursday's close of C$1.3338, or 74.97 U.S. cents.
    The currency's strongest level of the session was C$1.3318,
while it hit its weakest in 11 days at C$1.3416 soon after the
twin jobs reports came out before quickly paring those losses.
    Scotiabank's Bradley said sharp jumps in the intraday price
suggested a lack of liquidity in the currency pair.
    The loonie strengthened against the euro a day after a sharp
slide versus the common currency.
    Canadian government bond prices were higher across the
maturity curve, after having sold off on Thursday in sympathy
with German Bunds after European Central Bank easing was less
aggressive than some investors expected.
    The two-year price was up 4.5 Canadian cents to
yield 0.629 percent and the benchmark 10-year rose
36 Canadian cents to yield 1.581 percent. 
    

 (Additional reporting by Fergal Smith; Editing by Lisa
Shumaker)