CANADA FX DEBT-C$ weaker as oil falls, jobs data awaited

Thu Jul 7, 2016 5:28pm EDT
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(Adds trader comment, updates prices to close)
    * Canadian dollar settles at C$1.3003, or 76.91 U.S. cents
    * Bond prices mixed across the maturity curve

    By Alastair Sharp
    TORONTO, July 7 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Thursday as oil prices sunk to a
two-month low and North American stock markets broadly lost
ground ahead of jobs data due on Friday. 
    The Canadian dollar settled at C$1.3003 to the
greenback, or 76.91 U.S. cents, weaker than the Bank of Canada's
official close of C$1.2959, or 77.17 U.S. cents.
    The currency had initially strengthened but reversed course
after the U.S. government reported a drop in weekly crude
stockpiles close to analysts' forecasts, but far less than the
decline expected by market optimists. 
    Canada is a major exporter of crude.
    "It's a gloomy environment since Brexit," said David
Bradley, director of foreign exchange trading at Scotiabank,
referring to Britain's shock vote to leave the European Union
last month. "The market still seems thin, a lot of people are
still on the sidelines since the Brexit vote." 
    The currency's strongest level of the session was C$1.2878,
while its weakest level was C$1.3021.
    U.S. private payrolls increased more than expected in June
and fewer Americans applied for unemployment benefits last week,
suggesting a rebound in job growth after May's paltry gains, two
separate reports showed. 
    That added to services industry data from Wednesday that
showed surging new orders and hiring, suggesting the U.S.
economy regained speed in the second quarter. 
    Canada conducts most of its international trade with its
southern neighbor.
    Meanwhile, the value of Canadian building permits issued in
May unexpectedly dropped by 1.9 percent from April, Statistics
Canada data indicated on Thursday. 
    The federal statistics agency has not collected jobs data
for Fort McMurray since the Alberta city was engulfed by
wildfire in May, and has not decided when to resume the survey
    Jobs data for June is due out on Friday in both Canada and
the United States.
    Canadian government bond prices were mixed across the
maturity curve, with the two-year price up 4 Canadian
cents to yield 0.466 percent and the benchmark 10-year
 falling 6 Canadian cents to yield 0.979 percent.
    The Canada-U.S. two-year bond spread was -12.7 basis points,
while the 10-year spread was -40.6 basis points.

 (Editing by Bernadette Baum and Diane Craft)