CANADA FX DEBT-C$ pares losses from 1-week low

Thu Jun 2, 2011 8:27am EDT
 
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   * C$ slips to C$0.9769 to the U.S. dollar, or $1.0236
 * Bonds mostly higher across the curve
 TORONTO, June 2 (Reuters) - The Canadian dollar recovered
on Thursday from a one-week low hit overnight against the U.S.
currency, clawing back tentatively even as uncertainty about
the global economic recovery weighed.
 Meanwhile, most bond prices marched higher on the economic
jitters.
 The Canadian dollar dropped as low as C$0.9802 to the U.S.
dollar, or $1.0202, its lowest in a week, but had recovered
about 40 basis points to trade almost flat from the previous
session's close as the North American session got underway.
 U.S. stock index futures advanced on Thursday, while the
price of oil edged higher, putting a bit of positive outlook
for the North American session.
 But economic data could easily turn sentiment around.
 "Part of the overhang is that we have nonfarm expected
tomorrow and the potential for a weaker nonfarm may be weighing
on traders' minds," said Camilla Sutton, chief currency
strategist at Scotia Capital, referring to the U.S. Labor
Department's non-farm employment report.
 "Even though the actual consensus is potentially unchanged,
the whisper number is a lot lower."
 Friday's U.S. jobs data for May is the highly-anticipated
release of the week. Wednesday's private payrolls data hinted
at a weak jobs report, a key monthly driver of financial
markets given employment growth is one of the U.S. Federal
Reserve's two mandates.
 Markets are already prepared for data that will likely show
U.S. employment cooled in May, confirming the economy's loss of
momentum as it grapples with a raft of headwinds ranging from
high energy prices and bad weather to supply chain disruptions
from the earthquake in Japan. [ID:nN31283560]
 A weak figure would add to a recent stretch of soft data
that has reinforced concerns about an uneven economic recovery,
particularly in the United States, making investors take
riskier assets off the table.
 More U.S. data on Thursday could add fuel to those
concerns, with U.S. weekly jobless claims, due at 1230 GMT,
factory orders at 1400 GMT as well as chain store sales for
last month.
 At 7:50 a.m. (1150 GMT), the Canadian dollar CAD=D4 was
at C$0.9769 to the U.S. dollar, or $1.0236, down slightly from
Wednesday's North American session close at C$0.9757 to the
U.S. dollar, or $1.0249.
 Canada's two-year bond CA2YT=RR rallied 12 Canadian cents
to yield 1.440 percent, the 10-year bond CA10YT=RR was flat
to yield 2.991 percent.
 (Reporting by Ka Yan Ng, Editing by Chizu Nomiyama)