CANADA FX DEBT-C$ touches 6-month high; focus turns to U.S. jobs
* Canadian dollar at C$1.0667 or 93.75 U.S. cents * Bond prices lower across the maturity curve (Adds details, quotes, updates prices) By Leah Schnurr TORONTO, July 2 (Reuters) - The Canadian dollar was little changed against the greenback on Wednesday, pulling back from a six-month high hit in early trading that was undercut by data showing surprisingly strong hiring by companies south of the border. The loonie has been on an upward climb since early June, gaining 2.6 percent, a rise that has been fueled in part by higher than expected inflation in Canada and its implications for central bank policy. Since that inflation report nearly two weeks ago, the Canadian dollar has had momentum on its side as it has broken through key technical levels. "The loonie's obviously benefiting from the momentum it has had of late," said Rahim Madhavji, president at KnightsbridgeFX.com in Toronto. "A lot of people have been covering their short positions and that's exacerbating the move in the Canadian dollar." Madhavji said the loonie was also feeling the effect of traders positioning ahead of Thursdays U.S. unemployment data. The loonie touched a high of C$1.0627 in early morning trading, its highest since early January, before the robust U.S. jobs data cut the gain. U.S. companies hired 281,000 workers in June, marking the biggest monthly increase since November 2012, according to payrolls processor ADP. The U.S. dollar rose 0.2 percent against a basket of currencies, to the detriment of the loonie. The report comes a day ahead of the U.S. government's more comprehensive employment report for June, which will be closely watched by the market. Economists forecast the economy added 212,000 jobs last month. The Canadian dollar ended the North American session at C$1.0667 to the greenback, or 93.75 U.S. cents, a tad stronger than Monday's official Bank of Canada close of C$1.0670, or 93.72 U.S. cents. Whether the Canadian dollar can break through C$1.06 will be the next level traders will be watching, but any move into the C$1.05s and beyond is likely to be temporary, said Camilla Sutton, chief currency strategist at Scotiabank in Toronto. By the time the Bank of Canada's next policy meeting comes up on July 16, "we'll likely be off the highs in the Canadian dollar," she said. Indeed, a Reuters poll showed analysts expect the recent rally may be running out of steam. Canadian government bond prices were lower across the maturity curve, with the two-year off 6-1/2 Canadian cents to yield 1.134 percent and the benchmark 10-year down 79 Canadian cents to yield 2.325 percent. (Editing by Chris Reese)
© Thomson Reuters 2017 All rights reserved.