CANADA FX DEBT-C$ gets modest boost ahead of Friday jobs data

Wed Jul 8, 2009 8:02am EDT
 
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 * C$ up slightly at 85.81 U.S. cents
 * Friday's Canadian jobs data in focus
 * Bond prices tilt lower across curve
 By Frank Pingue
 TORONTO, July 8 (Reuters) - Canada's currency rose slightly
versus the U.S. dollar on Wednesday to recoup a sliver of the
ground lost during the prior session, but the move was capped
ahead of key domestic jobs data due later this week.
 Investors opted to shy away from big commitments given the
data due on Friday that is expected to show Canada's economy
shed 35,000 jobs in June while the unemployment rate moves to
8.7 percent from 8.5 percent in May.
 At 7:45 a.m. (1145 GMT), the Canadian unit was at C$1.1653
to the U.S. dollar, or 85.81 U.S. cents, up from C$1.1661 to
the U.S. dollar, or 85.76 U.S. cents, at Tuesday's close.
 "There has been a bit of an inclination for the U.S. dollar
to pick up a bit of steam lately and for some other currencies
to take it on the chin as a result," said Eric Lascelles, chief
economics and rates strategist at TD Securities.
 "But the Canadian dollar has managed to resist in the last
little while ... and we do continue to fall back on the notion
that Canada has a structurally healthier economy than the U.S.,
a healthier banking sector and is not engaged in quantitative
easing."
 Prices for oil and gold, both key Canadian exports whose
prices often influence the domestic currency, were lower but
not enough to lessen the value of the Canadian dollar.
 Lascelles said commodity prices could take another run
upwards at some point, but that until then it is hard to
imagine the Canadian dollar making a significant charge
at reaching parity with the greenback.
 Domestic bond prices were slightly lower across the curve
on concerns about more supply coming to the market and as stock
futures were pointing to a higher open.
 The Bank of Canada will announce shortly after midday the
results from its C$3.5 billion auction of government of Canada
bonds. The bonds have a coupon of 2.0 percent and mature on
Sept. 1, 2012.
 (Editing by Chizu Nomiyama)