CANADA FX DEBT-C$ extends gains as jobs data stays in focus

Wed Nov 12, 2014 10:11am EST
 
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* Canadian dollar at C$1.1307 or 88.44 U.S. cents
    * Bond prices rise across the maturity curve

    By Solarina Ho
    TORONTO, Nov 12 (Reuters) - The Canadian dollar strengthened
slightly against the U.S. dollar on Wednesday despite softer
crude oil prices, as investors continued to digest last Friday's
surprisingly robust domestic jobs report.
    The loonie extended gains made on Tuesday, when trading was
muted due to the closure of bond markets for Remembrance Day in
Canada and for Veterans Day in the United States.
    The Canadian dollar, which hit a more than five-year low
last week, has recouped some of those losses since the release
of the positive Canadian employment report on Friday, but
analysts expect the loonie to remain around the C$1.13 level in
the near term.
     The commodities-linked currency, hurt by a broad U.S.
dollar rally over the last several months, has also been hit
hard by a sharp drop in crude prices. Canada is a major oil
exporter.
    "You're getting a bit of consolidation. I think the markets
are still digesting the solid jobs report that we got last
Friday," said Bipan Rai, director of foreign exchange strategy
at CIBC World Markets, who said the Canadian dollar could
strengthen to C$1.1250 in the short term.
    "We fully expect the market to sell the loonie on those dips
and still have that bias to buy U.S. dollar against it."
    At 9:27 a.m. (1427 GMT), the Canadian dollar was
trading at C$1.1307 to the greenback, or 88.44 U.S. cents,
stronger than Tuesday's market close of C$1.1335, or 88.22 U.S.
cents.
    With little market-moving domestic data on tap over the next
few sessions, market participants will look at U.S. figures to
see if they continue to show a strengthening U.S. economy and
signal what impact that may have on U.S. Federal Reserve policy.
  
    Canadian government bond prices were higher across the
maturity curve, with the two-year up 4 Canadian cents
to yield 1.015 percent and the benchmark 10-year 
rising 12 Canadian cents to yield 2.045 percent.

 (Editing by Peter Galloway)