CANADA FX DEBT-C$ trades little changed after touching 2-1/2-month high

Thu May 9, 2013 9:56am EDT
 
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* C$ at C$1.0029 vs US$, or 99.71 U.S. cents
    * Eye on Friday's jobs data; survey sees 15,000 new jobs
    * Bond prices mixed
    * Poll sees C$ weakening against US$ in year ahead

    By Andrea Hopkins
    TORONTO, May 9 (Reuters) - The Canadian dollar was little
changed on Thursday after briefly touching its strongest level
in more than two months, building on a steady appreciation
towards parity with its U.S. counterpart ahead of Friday's key
domestic jobs report.
    Global stock markets held near multi-year highs as
relatively upbeat economic data and ongoing support from central
banks help buoy investor sentiment, though currency moves were
mostly subdued. 
    "Most currencies, with the exception of Australia and New
Zealand, are very close to where they closed yesterday. Markets
are pretty quiet, we haven't had a ton of news flow, and we're
really just digesting the host of second-tier but important
central bank meetings and commentaries this week," said Camilla
Sutton, chief currency strategist at Scotiabank.
    The Australian and New Zealand dollars bounced higher
following stellar labor reports in both countries, paring back
the risk of a June rate cut in Australia and reinforcing the
outlook for steady to higher New Zealand rates. 
    The Canadian dollar continued its slow-and-steady
appreciation against the U.S. greenback, inching towards parity.
  The currency has gained some 2-1/2 cents on the U.S. dollar
since late April. 
    At 9:24 a.m. EDT (1324 GMT) the Canadian dollar was
at C$1.0029, or 99.71 U.S. cents, slightly stronger than
Wednesday's North American session close at C$1.0033, or 99.67
U.S. cents. 
    Overnight the currency hit C$1.0014 to the greenback, its
strongest level since Feb. 15, and Sutton said the Canadian
dollar could test parity.
    "Momentum seems fairly strong. When we look at CAD on the
chart most technical studies suggest CAD is appreciating. Every
day we seem to be reaching, in dollar-Canada (terms), lower lows
and lower highs," she said.
    "Parity and C$0.9989, which is the 200-day average, are the
key levels."
    Over the longer term, the Canadian dollar is expected to
weaken against the greenback in the year ahead, according to a
Reuters poll published on Wednesday. Forecasters cited concern
about the economy's slow rate of growth compared with that of
the United States. 
    Sutton said all eyes will be on the Canadian employment
report due out on Friday, which is expected to show the Canadian
economy added 15,000 jobs in April after a steep decline notched
in March, according to a Reuters survey of analysts. 
    "Those that had factored in a very weak domestic outlook
have had to question that over the last month as data has
improved. Tomorrow's employment number is probably more
important than it typically is," Sutton said.
    Prices for Canadian government bonds were mixed. The
two-year bond rose 0.2 Canadian cent to yield 0.975
percent, while the benchmark 10-year bond fell 2
Canadian cents to yield 1.814 percent.