CANADA FX DEBT-C$ edges lower against firmer greenback

Wed Aug 3, 2016 9:47am EDT
 
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* Canadian dollar at C$1.3114, or 76.25 U.S. cents
    * Loonie touches its weakest since July 29 at C$1.3148
    * Bond prices mixed across the maturity curve

    TORONTO, Aug 3 (Reuters) - The commodity-linked Canadian
dollar edged lower against its U.S. counterpart on Wednesday as
the greenback recovered slightly after recent losses and oil
prices pared gains.
    Oil was slightly higher after hitting its lowest since April
the previous day, supported by an industry report showing a fall
in U.S. inventories. U.S. crude prices were up 0.33
percent to $39.64 a barrel, but trading well below the day's
high. 
    The U.S. dollar firmed against a basket of major
currencies after having hit a five-week low on Tuesday. Gains
for the greenback came as U.S. private employers added 179,000
jobs in July, above economists' expectations. 
    At 9:34 a.m. EDT (1334 GMT), the Canadian dollar 
was trading at C$1.3114 to the greenback, or 76.25 U.S. cents,
slightly weaker than Tuesday's close of C$1.3102, or 76.32 U.S.
cents.
    The currency's strongest level of the session was C$1.3081,
while it touched its weakest since July 29 at C$1.3148.
    The Canadian dollar is expected to weaken slightly against
the U.S. dollar over the coming months, a Reuters poll found,
with a sluggish domestic economy and lower oil prices seen
weighing on the commodity-linked currency. 
    Canadian government bond prices were mixed across the
maturity curve, with the two-year bond up 0.5
Canadian cent to yield 0.556 percent and the benchmark 10-year
 falling 12 Canadian cents to yield 1.09 percent.
    The curve steepened as the spread between the 2-year and
10-year yields widened by 1.5 basis points to 53.4 basis points,
indicating underperformance for longer-dated maturities. Last
week the spread touched its narrowest since June 2008.
    Canada's international trade data for June and employment
report for July are awaited on Friday.  

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)