CANADA FX DEBT-C$ weakens as oil falls, jobs data eyed

Thu Apr 7, 2016 4:32pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

(Adds trader comment, Reuters polls on C$, Canada rates;
updates prices)
    * Canadian dollar settles at C$1.3144, or 76.08 U.S. cents
    * Bond prices higher across the maturity curve

    By Alastair Sharp
    TORONTO, April 7 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Thursday as oil prices fell,
while Wall Street losses also weighed on the commodity-linked
currency as traders braced for a possible surprise in Friday's
Canadian jobs data.
    Oil settled lower as rising exports from Iraq underlined a
global supply glut and a pipeline outage had a modest impact on
U.S. crude inventories. 
    The Canadian currency settled at C$1.3144 to the
greenback, or 76.08 U.S. cents, weaker than Wednesday's close of
C$1.3094, or 76.37 U.S. cents.
    The currency's strongest level of the session was C$1.3019,
while its weakest was C$1.3181.
    "People are nervous, they're trading smaller positions,"
said David Bradley, a director of foreign exchange trading at
Scotiabank, citing uncertainty on the pace of further Federal
Reserve rate hikes and the outlook for oil prices, and the risk
that Britain leaves the European Union after a vote due in June.
    Canada's labor market report is expected to show 10,000 jobs
were added in March, rebounding from a decline in the previous
month. 
    "If we get something deviating substantially from that then
the market will definitely react to it," Scotia's Bradley said.
    U.S. crude settled down 1.3 percent at $37.26 a
barrel.
    The Canadian dollar may pull back in coming months because
of the prospect of Fed rate hikes and less-robust domestic
economic data, a Reuters poll showed. 
    Meanwhile, fiscal stimulus from the country's new Liberal
government could allow the Bank of Canada to start raising
interest rates sooner in 2017 than had been previously expected,
a separate Reuters poll found. 
    Canadian government bond prices were higher across the
maturity curve, with the price of the two-year rising
3.5 Canadian cents to yield 0.529 percent and the benchmark
10-year up 43 Canadian cents to yield 1.167 percent.
       
    The value of Canadian building permits issued in February
jumped by 15.5 percent on strength in the energy-producing
province of Alberta, which has been hit by the oil price slump,
Statistics Canada said. 
    

 (Additional reporting by Fergal Smith; Editing by Jeffrey
Benkoe and Meredith Mazzilli)