CANADA FX DEBT-C$ slips after recent gains; U.S. data weighs

Thu Apr 26, 2012 4:40pm EDT
 
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* C$ ends at C$0.9840 vs US$, or $1.0163
    * Weighed down by U.S. jobless data
    * C$ climbs to seven-month high overnight
    * Bond prices higher across curve

    By Jennifer Kwan	
    TORONTO, April 26 (Reuters) - Canada's dollar slipped
against its U.S. counterpart on Thursday, snapping four sessions
of gains and staying in a tight range for most of the day on
disappointing U.S. jobless claims data.	
    U.S. data on Thursday showed the number of Americans lining
up for new jobless benefits fell slightly last week but remained
above levels posted earlier this year, suggesting improvement in
the labor market is stalling. 	
    "Some people are seeing the initial jobless claims this
morning as potential sign of negativity because there was not a
big improvement," said Charles St-Arnaud, economist and currency
strategist at Nomura Securities in New York.	
    U.S. stocks, however, rose on a batch of strong earnings and
upbeat housing data. 	
    The Canadian dollar finished the session at
C$0.9840 versus the U.S. currency, or $1.0163, slightly softer
from Wednesday's close at C$0.9835 against the U.S. dollar, or
$1.0168. Overnight the currency hit C$0.9806, its strongest
level since Sept. 19. 	
    The market focus will turn back to Bank of Canada Governor
Mark Carney, who is scheduled to deliver a speech to an Ottawa
business audience early on Friday morning.	
    In testimony before a Senate committee on Wednesday, Carney
repeated that domestic economic conditions have improved to the
point where it may become necessary that some of the
considerable monetary policy stimulus in Canada may need to be
withdrawn.	
    He dismissed the notion that the suggestion of coming
interest rate hikes might hurt consumers, saying conditions are
still very stimulative.  	
    "Everything he has to say will drive markets right now
because people are really trying to see when is the timing of
the rate hike," said St-Arnaud.	
    Carney's testimony followed the U.S. Federal Reserve's
renewed pledge to hold interest rates near zero until late 2014
and Chairman Ben Bernanke's comments that the central bank would
not hesitate to resume asset purchases if necessary.
    "The interest rate picture is favoring the Canadian dollar
at this point," said Matt Perrier, a director of foreign
exchange sales at BMO Capital Markets.	
    The currency's gains were also capped by data that showed
euro zone economic sentiment fell more than expected in April,
driven by more pessimistic industry and services sectors, as the
economy sinks into recession. 	
    Canadian government bond prices were higher across the
curve. Canada's two-year bond gained 7 Canadian cents
to yield 1.395 percent, while the benchmark 10-year bond
 gained 32 Canadian cents to yield 2.067 percent.