CANADA FX DEBT-C$ edges up ahead of March jobs data
* C$ finishes higher for second session
* Market focus on March jobs data on Thursday
* Bonds higher, track U.S. Treasuries (Updates to close, adds quotes)
By Jennifer Kwan
TORONTO, April 8 (Reuters) - The Canadian dollar edged higher against the U.S. dollar on Wednesday but market action was muted ahead of key Canadian jobs figures set to be released on Thursday morning.
The relatively flat finish suggests investors were reticent to take major positions ahead of the jobs data, said Derek Burleton, senior economist Toronto-Dominion Bank.
"It'll give us a good sense as to how Canada's economy was faring at the end of the first quarter -- a quarter that was dismal," he said. "The hopes are we will get some easing in the rate of decline in the economy in the second quarter."
Canada is likely to have suffered its fifth straight month of heavy job losses in March, with the unemployment rate rising to its highest level in seven years.
The median forecast of analysts surveyed by Reuters was for a loss of 55,000 jobs following a loss of 82,600 in February. [ID:nN08487670]
The Canadian currency finished at C$1.2373 to the U.S. dollar, or 80.82 U.S. cents, up slightly from Tuesday's close at C$1.2378 to the U.S. dollar, or 80.78 U.S. cents.
It got support from gains on North American stock markets and an unexpectedly robust rise in Canadian housing starts in March.
Housing starts rose 13.7 percent in March -- snapping a six-month losing streak -- to a seasonally adjusted rate of 154,700 units. That beat the consensus expectations of analysts for 130,000 starts. [ID:nN08489392]
"It was better than expected, it did not deteriorate further, it adds to the growing body of evidence that the Canadian economy actually did OK in March," Doug Porter, deputy chief economist at BMO Capital Markets, said of the data.
He added that the housing starts data may raise hopes that even Thursday's employment numbers may not be quite as bad as expected.
BOND PRICES HIGHER
Canadian government bond prices were higher, climbing in tandem with U.S. Treasuries after minutes from the Federal Reserve's March FOMC meeting indicated U.S. central bankers had become more downbeat on the economy. [ID:nN08541282]
Sheldon Dong, fixed income analyst at TD Waterhouse Private Investment, said there was little to drive the market before Thursday's jobs data.
The two-year Canada bond was up 8 Canadian cents at C$100.35 to yield 1.086 percent, while the 10-year bond climbed 45 Canadian cents to C$107.45 to yield 2.895 percent.
The 30-year bond rose 75 Canadian cents to C$124.00 to yield 3.631 percent. In the United States, the 30-year Treasury yielded 3.6624 percent.
Canadian bonds mostly outperformed their U.S. counterparts. The 10-year bond yield was 4.10 basis points above its U.S. counterpart, compared to 4.50 basis points on Tuesday. (Reporting by Jennifer Kwan; editing by Peter Galloway)
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