CANADA FX DEBT-C$ dips, bonds steady ahead of jobs data

Thu Nov 5, 2009 8:25am EST
 
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 * Canadian dollar softens to 93.97 U.S. cents
 * Largely flat after overnight weakness, eye on equities
 * Bonds steady
 * Markets await Friday's U.S., Canada October jobs data
 TORONTO, Nov 5 (Reuters) - Canada's dollar was slightly
lower against the U.S. dollar on Thursday as market players
held back from major commitments ahead of jobs data from Canada
and the U.S..
 Market watchers were waiting this Friday's employment
reports from both Canada and the United States for further
clues on the strength of the economic recovery. Canada is
expected to show the economy added 10,000 jobs in October.
 At 8:10 a.m. (1310 GMT), the Canadian dollar was at
C$1.0642 to the U.S. dollar, or 93.97 U.S. cents, down from
C$1.0638 to the U.S. dollar, or 94.00 U.S. cents, at
Wednesday's close.
 "It seems very quiet market at the moment. Markets are sort
of struggling for direction in the short term after a fair bit
of event risk this week and more to come. There's probably not
much appetite to get involved at these levels," said Shaun
Osborne, chief currency strategist, at TD Securities.
 The Canadian currency had hit its highest level in more
than a week on Wednesday after the U.S. Federal Reserve kept
its commitment to low borrowing costs for an "extended
period."
 Overnight weakness pushed the Canadian currency as low as
C$1.0682 to the U.S. dollar, or 93.62 U.S. cents, as perceived
higher risk currencies fell on profit-taking ahead of interest
rate decisions by the Bank of England and the European Central
Bank.
 After the overseas rate decisions, where both central banks
kept rates unchanged, the currency was largely flat from the
previous session. It was likely to key off movement in the
equity markets during the session.
 "I think intraday we'll probably hinge off risk appetite,
and what equity markets do. The Fed kept policy accommodation
intact yesterday...that suggests the U.S. dollar is generally
going to struggle here," said Osborne.
 Meantime, Canadian bond prices were flat across the curve
as market players marked time ahead of the jobs data.
 The two-year bond CA2YT=RR was up 1 Canadian cent at
C$99.69 to yield 1.403 percent, while the 10-year bond
CA10YT=RR was unchanged at C$102.15 to yield 3.483 percent.
 (Reporting by Ka Yan Ng; Editing by Theodore d'Afflisio)