CANADA FX DEBT-C$ falls on jobs data; weak US$ supports
* C$ hits session low of C$0.9970 vs US$, $1.0030 * Canada's economy unexpectedly lost 30,400 jobs in July * Bonds higher across curve By Jennifer Kwan TORONTO, Aug 10 (Reuters) - The Canadian dollar eked out a small gain on Friday after sinking to a session low on Friday on an unexpectedly weak domestic data report for July, diminishing expectations the Bank of Canada would raise interest rates any time soon. The Canadian currency sank to C$0.9970 against the U.S. dollar, or $1.0030, after data showed the economy unexpectedly lost 30,400 jobs in July in a third disappointing month for the labor market with growth failing to gain momentum. Camilla Sutton, chief currency strategist at Scotiabank, said the report follows a string of disappointing releases. "I don't think the market ever fully believed in the Bank of Canada's fairly hawkish tone, but it certainly dampens expectations for rate hikes in Canada," said Sutton. But the currency clawed back from its weak point to hover around C$0.9917, or $1.0084, a hair higher from its North American finish at C$0.9920 versus the U.S. currency, or $1.0081. "What the price action today would indicate, in terms of the move lower in dollar/Canada, it would be based on some squaring of long dollar positions heading into the weekend. Nothing more, nothing less," said Jack Spitz, managing director of foreign exchange at National Bank Financial. "Euro is still trading the range. Dollar/Canada is still holding above the calendar low, but the move today has served to counteract the negative implications of that miss we saw earlier today," he added, referring to the worse-than-expected employment report. The data showed net job losses resulted from the elimination of 51,600 part-time positions, which overshadowed the 21,300 full-time jobs created, according to Statistics Canada data on Friday. There was little change in both public and private sector employment. The jobless rate climbed to 7.3 percent from 7.2 percent, with the biggest layoffs in wholesale and retail trade and in professional, scientific and technical services. The market had expected some 9,000 jobs to be created in July after mediocre gains of 7,300 in June and 7,700 in May. Apart from those key events there was little to sway the currency, said Spitz. Global shares lost momentum on Friday, falling slightly for the first time in five days, on weak Chinese trade data, though declines were limited by expectations policymakers could act to shore up the world's economies. Toronto and U.S. stocks were little changed. Stock markets' recent rally has been underpinned by comments by European Central Bank President Mario Draghi two weeks ago that the central bank was "ready to do whatever it takes to preserve the euro," raising hopes of heavy bond buying to aid Spain and Italy. The Canadian dollar mostly underperformed against its major currency peers including the New Zealand dollar, sterling and yen. Spitz said Canadian dollar resistance would likely be at C$0.9900-10 versus the greenback. Canadian bond prices were mostly higher. The two-year bond edged up 8 Canadian cents to yield 1.122 percent, and the benchmark 10-year bond was up 34 Canadian cents to yield 1.775 percent.
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