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