CANADA FX DEBT-C$ holds steady after last week's jobs data

Mon Aug 13, 2012 8:34am EDT
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* C$ at C$0.9914 vs US$, or $1.0087
    * Weak Cdn jobs data offset by recent BoC comments
    * Bond prices mostly lower

    By Jon Cook
    TORONTO, Aug 13 (Reuters) - Canada's dollar was little
changed on Monday against its U.S. counterpart, as weakness from
last week's soft domestic jobs data was offset by recent
supportive comments from the Bank of Canada that suggested the
bank may raise interest rates.
    Canada's economy unexpectedly lost 30,400 jobs in July in a
third disappointing month for the labor market with growth
failing to gain momentum, data on Friday showed. 
    "It's very quiet," said David Bradley, director of foreign
exchange trading at Scotiabank. "If the Canadian dollar does
continue to appreciate it's going to do it slowly."
    At 8:08 a.m. EDT (1208 GMT), the Canadian currency 
was at C$0.9914 against the U.S. dollar, or $1.0087, virtually
unchanged from Friday's close at C$0.9910, or $1.0091.
    Overnight, Canada's dollar touched last week's three-month
high against the greenback at C$0.9906, or $1.0095, and Bradley
said the currency would likely stay within a tight range between
C$0.9850 and parity with the greenback.
    "After the move over the last week or two we're probably due
for a bit of a correction," he added.
    The Canadian currency was boosted last week after remarks
from Bank of Canada Governor Mark Carney that signaled the
central bank may still raise interest rates. 
    While he acknowledged that Canada's economy was being
negatively impacted by the global slowdown, Carney nevertheless
told the BBC: "we may withdraw some of that monetary policy
    Carney has held interest rates at an ultra-low 1 percent for
nearly two years, but the prospect of the bank raising rates
well ahead of the U.S. Federal Reserve has helped boost the
Canadian currency since the beginning of June.
    The Canadian dollar was also taking some direction from the
euro, which held steady on Monday, helped by the prospect of
European Central Bank action to tackle the debt crisis. 
    Canadian bond prices were mostly lower. The two-year bond
 fell 4 Canadian cents to yield 1.148 percent, and the
benchmark 10-year bond dropped 26 Canadian cents to
yield 1.810 percent.