CANADA FX DEBT-C$ holds steady in quiet trading after mixed data

Thu Mar 28, 2013 4:40pm EDT
 
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* C$ at C$1.0160 vs US$, or 98.43 U.S. cents
    * Canadian January GDP up a higher-than-expected 0.2 pct
    * U.S. quarterly GDP slightly weaker than analysts' view
    * U.S. weekly jobless claims rise more than expected

    By Solarina Ho
    TORONTO, March 28 (Reuters) - The Canadian dollar traded
little changed on Thursday against its U.S. counterpart
following data that showed Canada's economy rebounded in
January, even while a report showed U.S. fourth-quarter growth
to be slightly weaker than expected by analysts.
    Equity, bond and currency markets were all relatively flat
heading into the Easter long weekend.
    "We don't have a lot of volume flowing through today," said
Mark Frey, chief market strategist at Cambridge Mercantile
Group. "It's definitely illiquid heading into the long weekend."
    The Canadian dollar finished the North American
session at C$1.0160 versus the greenback, or 98.43 U.S. cents,
little changed from Wednesday's North American close of
C$1.0165, or 98.38 U.S. cents.
    It rose as high as C$1.0145, or 98.57 U.S. cents, its
strongest level in more than a month, immediately after the
Canadian growth data was released, but then retreated.
    The Canadian economy grew a higher-than-expected 0.2 percent
in January following the weakest two quarters since the 2008-09
recession, thanks to solid manufacturing and mining and an end
to a National Hockey League work stoppage, Statistics Canada
said. 
    "The rebound in January bodes well for quarterly growth ...
but the pace is still looking fairly moderate, sub-potential,"
said Paul Ferley, assistant chief economist at Royal Bank of
Canada.
    Figures on Thursday also showed industrial product prices
increased in February, up 1.4 percent from January, the biggest
jump since June 2008 as prices for petroleum, coal and other
commodities rose.
    U.S. data, meanwhile, showed the number of Americans filing
new claims for unemployment benefits rose more than expected
last week, but likely not enough to suggest the labor market
recovery was taking a step back. 
    Separate data also showed the U.S. economy expanded at an
annual rate of 0.4 percent in the fourth quarter, more than the
government had expected, but just below the 0.5 percent gain
forecast by analysts in a Reuters poll. 
    The Canadian dollar's performance was mixed against other
currencies. It strengthened against the Australian dollar
, but weakened against the euro. It still
traded close to 2-1/2 month highs against the euro, however, as
the latter remained vulnerable to the crisis in Cyprus, where
banks reopened after the imposition of capital controls. 
    Month- and quarter-end positioning buoyed the euro, with
investors covering bets against the currency.
    The economic calendar is bare next week until Friday, when
payroll figures will be released in Canada and the United
States. Analysts said any movement in the currency before then
will take its cue from overseas. 
    "The corporate flow is going to be light. Everyone is going
to be tuned into what's going on in Europe and Cyprus and any
further developments," Frey said.
    The price of government bonds was mixed, with the two-year
bond down 1.5 Canadian cents to yield 1.002 percent,
while the benchmark 10-year bond rose 4.9 Canadian
cents to yield 1.875 percent.