CANADA FX DEBT-C$ strengthens as mixed view on economy pressures US$

Thu Aug 15, 2013 5:07pm EDT
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* C$ at C$1.0304 vs US$, or 97.05 cents
    * U.S. jobless claims falls to near six-year low
    * U.S. CPI rises in July
    * Bond prices fall across curve

    By Solarina Ho
    TORONTO, Aug 15 (Reuters) - The Canadian dollar strengthened
against a weaker U.S. dollar on Thursday as a slew of U.S.
economic data failed to provide further clarity on when the
Federal Reserve might begin scaling back its stimulus program.
    Data showed fewer-than-expected Americans filed new claims
for jobless benefits last week, with initial claims falling to a
near six-year low. U.S. consumer prices rose in July. The upbeat
data helped underpin early session views the Fed could shift its
policy position sooner rather than later. 
    "The data that came out had taper written all over it from a
market perspective...but then we started to see a little bit of
a reversal on that," said Don Mikolich, executive director,
foreign exchange sales at CIBC World Markets.
    The greenback retreated after a survey showed factory
activity in the U.S. mid-Atlantic region weakened in August as
new orders fell and the pace of hiring slowed. 
    The commodities-linked Canadian dollar was also bolstered in
part by higher resource prices, including oil, a key Canadian
export. A stronger equity market in Canada also contrasted with
the broader global equity market.
    The Canadian dollar finished the North American
session at C$1.0304 versus the U.S. dollar, or 97.05 U.S. cents,
stronger than its Wednesday close at C$1.0328, or 96.82 cents.
    Canadian manufacturing sales data, due out Friday, is not
expected to be a huge market mover.
    "It's extremely quiet ... Until retail sales and CPI next
week, I think the Canadian dollar will continue to mainly follow
what's happening in the global economy," said Charles St-Arnaud,
economist and currency strategist with Nomura Securities in New
    Prices for Canadian government debt were lower across the
maturity curve. The two-year bond slipped 2 Canadian
cents to yield 1.214 percent and the benchmark 10-year bond
 fell 37 Canadian cents to yield 2.674 percent.