CANADA FX DEBT-C$ edges higher, global factors to influence

Thu Mar 3, 2011 8:43am EST
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   * C$ up at C$0.9723, or $1.0285
 * Bond prices weaker across the curve
 * Trichet, oil, risk aversion seen driving direction
 * C$ range seen between C$0.9684 and C$0.9776
 By Solarina Ho
 TORONTO, March 3 (Reuters) - The Canadian dollar firmed
modestly against its U.S. counterpart on Thursday as the
currency markets positioned themselves ahead of expected
hawkish comments by the European Central Bank.
 With no major economic news expected out of Canada, the
markets are expected to track global sentiment. ECB chief
Jean-Claude Trichet will likely keep his anti-inflation
rhetoric as the price of crude continues to skyrocket. [FRX/]
 "Today's Trichet comments -- the markets have certainly
positioned themselves to turn more hawkish so that will drive
the broader U.S. dollar move," said Camilla Sutton, chief
currency strategist at Scotia Capital.
 The comments are seen supporting the euro against the U.S.
dollar, though some market players speculate the euro could
weaken since Trichet's expected comments are priced in.
 The U.S. dollar move, general risk aversion and oil prices
are also expected to drive direction for the Canadian currency,
Sutton said.
 At 8:18 a.m. (1318 GMT), the currency CAD=D4 stood at
C$0.9723 to the U.S. dollar, or $1.0285, up from Wednesday's
North American finish of C$0.9724, or $1.0284.
 "We don't really have a lot going on. Everyone's waiting
for Trichet's speech today so as we move into the North
American open, Canada's really a mid-performer ... really very
much in the middle of the pack here."
 The price of oil, a key Canadian export, fell on Thursday
after the Arab League said a peace plan for Libya was under
consideration and despite skepticism that fighting could end
quickly in the North African country. The OPEC producer's oil
production has been cut by half, according to estimates,
following the revolt against Libyan leader Muammar Gaddafi.
 The price of Brent and of U.S. crude was still firmly above
$100 a barrel, however. [O/R]
 The Canadian dollar is seen trading between its recent high
of C$0.9684 and Wednesday's low of C$0.9776, according to
 Looking ahead, Friday's U.S. employment data will be
important in North America as investors look for signs that a
self-sustaining economic recovery has taken root. U.S.
employment is expected to have soared in February to its
largest gain in nearly a year. [ID:nN01163324]
 Canadian bond prices fell across the curve. [US/]
 The two-year bond CA2YT=RR was down 1.5 Canadian cents to
yield 1.837 percent, while the 10-year bond CA10YT=RR lost 6
Canadian cents to yield 3.352 percent.
 (Editing by James Dalgleish)