CANADA FX DEBT-C$ weakens on concerns about global economy
* C$ at C$0.9929 vs US$, or $1.0072 * Currency follows global stocks lower * Overnight, C$ hits high of C$0.9906 * Bond prices mostly lower across curve By Jennifer Kwan TORONTO, Aug 13 (Reuters) - The Canadian dollar edged lower on Monday against its U.S. counterpart in tandem with global stock markets as Japanese economic data added to concerns about slowing global economic growth. European shares had their worst day in more than a week and U.S. stocks fell after six days of gains for the S&P 500 after Japan reported its gross domestic product expanded just 0.3 percent in the second quarter. The data highlighted the impact of Europe's debt crisis on world demand. "The absence of economic news in the North American space means the Canadian dollar is operating on the basis of global metrics. Equities are lower. Commodities are more or less mixed to slightly lower," said Jack Spitz, managing director of foreign exchange at National Bank Financial. At 2:30 p.m. (1830 GMT), the Canadian currency was around C$0.9929 against the U.S. dollar, or $1.0072, slightly lower than Friday's close at C$0.9910, or $1.0091. The currency had been higher overnight, touching C$0.9906, as weakness from last week's soft domestic jobs data was offset in part 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. David Bradley, director of foreign exchange trading at Scotiabank, 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 stimulus." 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. Canadian bond prices were mostly lower. The two-year bond sank 2 Canadian cents to yield 1.136 percent, and the benchmark 10-year bond edged lower by 1 Canadian cent to yield 1.783 percent.
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