CANADA FX DEBT-C$ tips higher, bonds fall as risk appetite rises

Thu Sep 3, 2009 9:24am EDT
 
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 * C$ firms slightly to C$1.1026 per US$
 * Bond prices moderately lower across curve
 * Traders await Friday's key jobs data
 By Ka Yan Ng
 TORONTO, Sept 3 (Reuters) - The Canadian dollar pushed
higher against the U.S. currency on Thursday, boosted by a rise
in risk appetite and commodity prices, while bonds weakened on
a positive tone in equity markets.
 At 8:53 a.m. (1253 GMT), the Canadian currency was at
C$1.1026 to the U.S. dollar, or 90.69 U.S. cents, up from
C$1.1048 to the U.S. dollar, or 90.51 U.S. cents, at
Wednesday's close.
 As in recent days, the Canadian dollar is expected to track
equities until Friday when U.S. and Canadian jobs figure are
released.
 Stronger oil prices also lent support, allowing the
Canadian dollar to extend gains made overnight.
 Shaun Osborne, chief currency strategist at TD Securities,
said technicals may also be a factor now that the Canadian
dollar has tested the C$1.11 area four or five times without
consistently pushing through.
 "Technically I think the momentum has turned a little bit
for the Canadian dollar," he said.
 In the previous session, Canada's currency rebounded off a
two-week low to finish little changed with traders reluctant to
make big bets ahead of key domestic jobs data due later this
week.
 Canada is expected to have shed 10,000 jobs in August, a
smaller decline than July, while the unemployment rate is seen
rising. [ID:nN02544477]
 "I think it will suggest or add to the body of evidence out
there suggesting that things in Canada at least are starting to
stabilize and probably improve a little bit," Osborne said.
 The Canadian numbers will be released just before the U.S.
nonfarm payrolls report, and the data should influence trade in
both the currency and bond market in the early part of the
session ahead of the long weekend.
 Financial markets in Canada and the U.S. will be closed on
Monday for Labor Day.
 Canadian bond prices were lower as overseas equity markets
firmed and North American stocks looked set to extend those
gains, reducing demand for government debt.
 Prices remained steady after an unexpectedly weak reading
on claims for U.S. jobless benefits. [ID:nN0386180]
 The two-year bond CA2YT=RR dipped 3 Canadian cents to
C$99.51 to yield 1.254 percent, while the 10-year bond
CA10YT=RR was 25 Canadian cents lower at C$103.20 to yield
3.361 percent.
 The 30-year bond CA30YT=RR slipped 30 Canadian cents to
C$118.95 to yield 3.878 percent.
 (Reporting by Ka Yan Ng; Editing by Jeffrey Hodgson)