CANADA FX DEBT-C$ recovers after recent sell-off; jobs in view

Mon Oct 6, 2014 9:31am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* Canadian dollar at C$1.1219 or 89.13 U.S. cents
    * Bond prices mixed across the maturity curve

    By Leah Schnurr
    TORONTO, Oct 6 (Reuters) - The Canadian dollar firmed
against the greenback on Monday, backing away from the more than
six-month low hit last week as the currency took a breather and
investors looked ahead to key domestic jobs data later in the
    A sharp drop on Friday had put the loonie within striking
distance of testing the low for 2014 so far at C$1.1279, which
was seen in March. 
    Its failure to reach that level could give the currency some
positive momentum in the short term. The loonie was also boosted
by a pullback in the U.S. dollar after 12 consecutive
weeks of gains.
    But analysts expect the currency pairing will return to the
trend it has seen over the last three months as expectations the
Federal Reserve is moving closer to raising interest rates lift
the greenback, to the detriment of the Canadian dollar.
    "It's hard to argue against further upside potential for the
(U.S. dollar-Canadian dollar) pair, just because you've got
diverging monetary policies between the U.S. and Canada," said
Scott Smith, senior market analyst at Cambridge Mercantile Group
in Calgary.
    "The U.S. is going to look to raise rates sooner than Canada
will and there's still some mediocre data we have to muddle
along through before we see our export sector gain the needed
traction and robust growth to help the loonie gain back some of
its losses."
    The Canadian dollar was at C$1.1219 to the
greenback, or 89.13 U.S. cents, stronger than Friday's close of
C$1.1259, or 88.82 U.S. cents.
    On the data front, investors will take in a handful of
reports on the housing sector this week, but the main economic
event will be the labor market report for September due on
    Employers are expected to pick up the pace of hiring by
creating 20,000 new positions last month, more than recovering
the 11,000 jobs lost in August. The unemployment rate is seen
holding at 7 percent. 
    Canadian government bond prices were mixed across the
maturity curve, with the two-year up 1-1/2 Canadian
cents to yield 1.121 percent, while the benchmark 10-year
 was down 8 Canadian cents to yield 2.101 percent.

 (Editing by Meredith Mazzilli)