CANADA FX DEBT-C$ weakens modestly as investors eye jobs report

Thu Aug 7, 2014 9:35am EDT
 
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* Canadian dollar at C$1.0924 or 91.54 U.S. cents
    * Bond prices mostly lower across the maturity curve

    By Leah Schnurr
    TORONTO, Aug 7 (Reuters) - The Canadian dollar weakened
slightly against the greenback on Thursday, pulling back from
the previous session's strong gains as investor focus was
turning to the key domestic labor market report at the end of
the week.
    The loonie saw little reaction to data that showed the value
of building permits issued in June surged, contrary to
economists' forecasts for a decline. 
    The Canadian dollar has lost 1.6 percent in the last two
weeks as optimism that the U.S. recovery is picking up speed has
sent investors into the greenback, pushing the loonie lower.
    After Wednesday's rise on the back on better-than-expected
trade figures, the loonie is consolidating as investors look to
Friday's employment report, said Mazen Issa, senior Canada macro
strategist at TD Securities in Toronto.
    "That seems to be the chatter is that everyone is just
waiting for tomorrow's jobs numbers to be the next catalyst for
the next move in U.S. dollar-Canadian dollar," said Issa.
    The economy is forecast to have added 20,000 jobs in July
after unexpectedly losing jobs the month before. The
unemployment rate is seen holding steady at 7.1 percent.
 
    The Canadian dollar was at C$1.0924 to the
greenback, or 91.54 U.S. cents, weaker than Wednesday's close of
C$1.0913, or 91.63 U.S. cents.
     Analysts still expect to see more weakness for the
currency.
    "The trend we've seen the last couple weeks of a weaker
Canadian dollar will resume, we're just looking for some
validation from tomorrow's jobs numbers to reassert that trend,"
said Issa.
    The loonie could trade in a range between C$1.0910 and
C$1.0940 in Thursday's session, he said.
    Canadian government bond prices were mostly lower across the
maturity curve, with the two-year down 1 Canadian
cent to yield 1.087 percent and the benchmark 10-year
 unchanged to yield 2.111 percent.

 (Editing by W Simon)