CANADA FX DEBT-C$ nudges higher on hopes for stronger jobs data

Wed Aug 13, 2014 4:44pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* Canadian dollar at C$1.0917 or 91.60 U.S. cents
    * Bond prices higher across the maturity curve

    By Solarina Ho
    TORONTO, Aug 13 (Reuters) - The Canadian dollar strengthened
marginally against its U.S. counterpart on Wednesday with
traders cautiously optimistic that July's domestic employment
figures could be more positive than previously thought after the
country's statistical agency said the original report contained
an error and must be restated.
    Statistics Canada said on Tuesday that the corrected jobs
estimates will be released on Friday, but did not specify what
the error was. The original report, released last Friday, showed
the economy added just 200 jobs in July, far fewer than analysts
had forecast. 
    "There is certainly a view that everybody is looking at this
through rose-tinted spectacles; that they expect the revisions
to be an improvement, and quite sizeable," said Amo Sahota,
director at Klarity FX in San Francisco. "Otherwise why would
they not just bundle it into the revision for the next period?"
    The Canadian dollar, which was generally stronger
against most other major currencies, closed at C$1.0917 to the
greenback, or 91.60 U.S. cents. That was slightly stronger than
Tuesday's finish of C$1.0922, or 91.56 U.S. cents.
    Sahota said the loonie would likely have weakened closer to
C$1.0950, or tried to drop through C$1.0980, if it weren't for
the unexpected news on the job figures. "The risk is people are
on the optimistic side of things," he said.
    The currency has held mainly within a relatively narrow
range of C$1.0877 to C$1.0986 over the last 10 sessions.
    "We've had all these currencies stuck in some fairly tight
ranges ... and that's kind of continuing," said Camilla Sutton,
chief currency strategist at Scotiabank. "A lot of traders are
quite focused on what Friday's employment release will really
mean and what the error is."
    The Canadian dollar was little changed for much of the
session, but got an early lift from an unexpectedly flat U.S.
retail sales report for July. That indicated a moderation in
consumer spending early in the current quarter and pressured the
U.S. dollar.    
    Retail sales, which account for a third of U.S. consumer
spending, had the weakest reading since January in July and
could leave the U.S. Federal Reserve in no rush to start hiking
interest rates. 
    In Canada, data showed that home resale prices rose in July
and that the pace of 12-month home price appreciation
accelerated. 
    Canadian government bond prices were higher across the
maturity curve, with the two-year bond up 3 Canadian
cents to yield 1.070 percent and the benchmark 10-year
 bond rising 42 Canadian cents to yield 2.069
percent.

 (Reporting by Solarina Ho; Editing by Nick Zieminski; and Peter
Galloway)