CANADA FX DEBT-C$ firms despite weaker oil; focus on data at week's end

Mon Nov 4, 2013 5:09pm EST
 
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* C$ at C$1.0418 vs US$, or 95.99 U.S. cents
    * Investors focus on ECB, North American employment data
    * Canadian bond prices rise across the curve


    By Cameron French
    TORONTO, Nov 4 (Reuters) - The Canadian dollar touched its
highest level in more than a week on Monday, benefiting from a
weakening U.S. dollar and withstanding the impact of weaker
crude oil prices as traders looked to key jobs data due at the
end of the week.
    Strong European manufacturing data boosted the euro and
pressured the greenback, which kept the U.S. currency from
halting its modest recent decline against the Canadian currency.
The Canadian dollar has risen for three straight sessions after
hitting an eight-week low versus the greenback last Wednesday.
    "We saw (the U.S. dollar) push up last week, got up to
C$1.05, and then a bit of a drift back," said Shaun Osborne,
chief currency strategist at TD Securities.
    "We're in a bit of a data vacuum at the moment and I think
the market's just consolidating." 
    The Canadian dollar ended the North American
session at C$1.0418 versus the U.S. dollar, or 95.99 U.S. cents,
up from Friday's North American session close at C$1.0427 versus
the greenback, or 95.90 U.S. cents.
    Osborne said many traders were likely in a holding pattern
ahead of Friday's U.S. October payrolls report, which is
expected to show a modest rise of just 125,000 jobs in the wake
of last month's government shutdown in Washington. 
    Canadian employment data is also due on Friday and expected
to show 13,500 new jobs added in October, after a gain of just
11,900 in September. As well, the European Central Bank
and the Bank of England hold policy meetings on Thursday, which
could impact the currency.
    Looking beyond the data, Osborne said he expects the
Canadian dollar eventually to resume its decline against the
U.S. dollar and should hit C$1.06, or 94.33 U.S. cents, before
the year is out. The Canadian dollar is down nearly 5 percent so
far this year.
    "We think any modest dip as really a buying opportunity from
a U.S. dollar point of view," he said.
    U.S. crude rebounded near the end of trading, but still
ended down slightly, which likely held back the commodity-linked
Canadian currency from further gains.
    Canadian government bond prices were up slightly across the
yield curve. The two-year bond rose 1 Canadian cent
to yield 1.117 percent, and the benchmark 10-year bond
 climbed 5 Canadian cents to yield 2.492 percent.