CANADA FX DEBT-C$ edges higher, global factors to influence
* 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 Sutton.
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)
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