CANADA FX DEBT-C$ hits 4-month high; investors look to jobs report
* Canadian dollar at C$1.0823 or 92.40 U.S. cents * Bond prices mixed across the maturity curve (Adds details, quotes, updates prices) By Leah Schnurr TORONTO, May 8 (Reuters) - The Canadian dollar firmed to a four-month high against the greenback on Thursday, after data out of China eased concerns over the strength of the world's second-largest economy, while investors turned their attention to Friday's domestic unemployment report. The loonie also got some support from data that showed Canadian housing starts rebounded in April, while new home prices edged up in March. The currency got off to a strong start overnight as investors were cheered by data that showed China's exports and imports returned to growth in April. The Canadian dollar is sensitive to economic news from China, a major consumer of natural resources. China had seen a weaker-than-expected start to 2014, which prompted nervousness over the prospects for global growth. "Those better numbers helped put some optimism out there that there might be a floor under the weakness we saw in the growth numbers for the first quarter in the Chinese economy and we could see a rebound in the second quarter," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. Momentum trading helped carry the loonie higher, adding on to this week's strength that has seen the currency break away from the trading range around C$1.10 it had been stuck in. After breaking the C$1.0940 support level earlier in the week, "it just seems to be downside ever since" for the U.S. dollar-Canadian dollar pairing, said Mazen Issa, senior Canada macro strategist at TD Securities in Toronto. The Canadian dollar ended the North American session at C$1.0823 to the greenback, or 92.40 U.S. cents, stronger than Wednesday's close of C$1.0894, or 91.79 U.S. cents. The loonie touched a session high of C$1.0814, its highest level since early January when the currency was on a sharp descent. "At this juncture, it's looking for a catalyst to provide more medium-term direction," said Issa. "It really does put a great deal of importance on tomorrow's employment report, which is being viewed now as a big pivot point for the next leg in U.S. dollar-Canadian dollar." Friday's labor market report for April is expected to show the Canadian economy added 12,000 jobs last month, cooling after a surge of 42,900 in March. The unemployment rate is seen holding steady at 6.9 percent. The Canadian dollar was also stronger against the euro on Thursday after European Central Bank President Mario Draghi said the ECB is ready to take action next month to boost the region's economy if updated inflation forecasts merit it. The euro was at C$1.4985. Canadian government bond prices were mixed across the maturity curve, with the two-year was unchanged to yield 1.075 percent. The benchmark 10-year rose 8 Canadian cents to yield 2.371 percent. (Editing by Chizu Nomiyama)
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