CANADA FX DEBT-C$ weakens; action seen subdued until jobs data

Mon Apr 1, 2013 4:38pm EDT
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* C$ at C$1.0167 vs US$, or 98.36 U.S. cents
    * Focus on central bank policy meetings
    * Canadian and U.S. jobs data on Friday to provide impetus

    By Alastair Sharp
    TORONTO, April 1 (Reuters) - The Canadian dollar ended
marginally weaker against the U.S. currency on Monday with
volumes stunted by the Easter holidays and by trepidation ahead
of several central bank policy decisions due later in the week.
    The next major domestic catalyst is likely to be a jobs
report due out on Friday, and strategists will to look to stock
markets and other major currencies to provide direction until
    "Canada's got a really quiet week until the employment data
on Friday," said David Bradley, a director of foreign exchange
trading at Scotiabank. 
    "So we'll be to-ing and fro-ing based off what the equity
markets do, and to some extent the commodities and how the
(U.S.) dollar in general trades," he said.
    The Canadian dollar ended the day changing hands at
C$1.0167 to the greenback, or 98.36 U.S. cents, compared with
C$1.0160, or 98.43 U.S. cents, at Thursday's North American
    The loonie, as Canada's currency is colloquially known, has
traded between C$1.0140 and C$1.0200 in the past three sessions.
    "It's a very quiet start to the week. There are lots of
central banks meeting this week, which is contributing to the
lack of interest at the moment," said Shaun Osborne, chief
currency strategist at TD Securities.
    The European Central Bank, the Bank of Japan, the Reserve
Bank of Australia and the Bank of England are all due to make
policy announcements this week, leaving currency strategists
unwilling to make big bets before the news. 
    "The uncertainty that the situation currently is provoking
has really curtailed interest in positioning ahead of the bank
meetings," Osborne said.
    Prices for Canadian government debt were higher across the
curve, with the two-year bond up 2 Canadian cents to
yield 0.994 percent, and the benchmark 10-year bond 
rising 25 Canadian cents to yield 1.849 percent.
    Scotia's Bradley said that the loonie would likely not
strengthen much more after a recent rally and that soft upcoming
data could push it toward C$1.0225, a level that could prompt
further selling to pressure the currency towards C$1.0350.
    Canada's Friday's employment report, coupled with similar
data out of the United States on the same day, will illustrate
the extent to which businesses are hiring as the two economies
try to recover. 
    Canadian employment data is expected to show the economy
added just 8,500 net new jobs in March, well down from the
higher-than-expected 50,700 added in February. The unemployment
rate is seen unchanged at 7.1 percent.
    Canada recently experienced a burst of outsized job growth,
with an average of 29,000 jobs created per month over the past
six months. But economists have warned the pace of new hiring
will decline given slowing economic growth, a cooling property
market and record high household debt levels.