CANADA FX DEBT-C$ softens on euro zone fears; eyes jobs data

Thu Apr 5, 2012 8:14am EDT
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* C$ at C$0.9982 vs US$, or $1.0018
    * Market awaits domestic, U.S. jobs data
    * Bonds higher across curve

    By Jennifer Kwan	
    TORONTO, April 5 (Reuters) - Canada's dollar softened
slightly against its U.S. counterpart on Thursday, weighed down
by worries about the financial stability of the euro zone, while
investors also awaited the release of domestic and U.S. jobs
    Moves in the currency were largely influenced by weaker
European shares and the euro, which fell on Thursday with
further losses expected as Spanish government bonds were under
pressure as worries grew about Spain's ability to meet deficit
targets and fund itself after a poorly received auction the day
    David Bradley, director of foreign exchange trading at
Scotia Capital, said a key factor lifting the U.S. dollar was
the lingering effect of minutes from the U.S. Federal Reserve's
March meeting.	
    The U.S. central bank's minutes, released on Tuesday,
suggested the appetite for a third dose of quantitative easing,
so-called QE3, has decreased as the American recovery firms.
    "It's the continuation after the FOMC minutes. The U.S.
dollar has rallied since then," he said. "The euro is selling
off, partially on that, and the fact there seems like there's
some trouble brewing in Europe."	
    At around 7:50 a.m. (1150 GMT), the Canadian dollar 
was at C$0.9982 versus the U.S. currency, or $1.0018, down from
its Wednesday North American finish of C$0.9964 versus the U.S.
currency, or $1.0036.	
    Markets are next focusing on Canadian employment data.
Hiring in Canada is expected to recover a bit in March from	
February but not enough to mark a turning point for the job	
market, which has stalled since the middle of last year. The
economy is seen adding 10,000 jobs in March, while the jobless
rate may tick up to 7.5 percent. 	
    As well, the U.S. Labor Department releases first-time
claims for jobless benefits for the week ended March 31. 	
    Canadian government bond prices edged higher across the
curve, mirroring the rise in U.S. Treasuries that rallied
strongly as a flare-up of euro zone debt fears drove investors
to the safety of government debt. 	
    Canada's 2-year bond was up 6 Canadian cents to
yield 1.191 percent, while the 10-year bond rose 35
Canadian cents to yield 2.090 percent.