CANADA FX DEBT-C$ edges up in restrained trading

Thu Dec 9, 2010 10:36am EST
 
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   * C$ edges up to 99.00 U.S. cents
 * Bonds flat to higher, tracking U.S. Treasuries
 (Adds details)
 TORONTO, Dec 9 (Reuters) - The Canadian dollar firmed
slightly against the U.S. currency as recovery hopes perked up
on a U.S. labor report that showed new claims for unemployment
benefits were lower than expected last week.
 The data showed initial claims for state unemployment
benefits dropped 17,000 to a seasonally adjusted 421,000, below
economists' expectations for 425,000. The four-week moving
average slipped to a fresh two-year low. [ID:nN09222654]
 The Canadian dollar CAD=D4 rose to session high at
C$1.0066 to the U.S. dollar, or 99.34 U.S. cents, before paring
gains slightly as stock market indexes and the price of oil
also trimmed gains.
 At 10:15 a.m. (1515 GMT), the Canadian dollar was at
C$1.0101 to the U.S. dollar, or 99.00 U.S. cents, up from
Wednesday's close of C$1.0108 to the U.S. dollar, or 98.93 U.S.
cents.
 "Some of the move started to happen before the claims
report, then there was some stability. It's probably broad
market moves that are feeding the movement in the Canadian
dollar today," said Sacha Tihanyi, currency strategist at
Scotia Capital.
 "But it really is a restrained day out there."
 Still to come in the session, the Bank of Canada is
expected to release its Financial System Review later. There
was little reaction to Canadian data that showed new home
prices edged higher by 0.1 percent in October from September,
for the third  consecutive gain. [ID:nN0979036]
 Key technical ranges in the short term include C$1.0139 to
the U.S. dollar, a support level for the Canadian currency,
said Matthew Strauss, senior currency strategist at RBC Capital
Markets. A key Canadian dollar resistance level is at C$1.0078
to the greenback.
 Canadian bond prices were largely flat to higher on
Thursday, tracking U.S. Treasuries. Debt prices edged higher as
a better than expected bond auction the previous session
encouraged buyers to creep back into the market, ending a
two-day selloff. [US/]
 The two-year bond CA2YT=RR was up 5 Canadian cents to
yield 1.666 percent, while the 10-year bond CA10YT=RR was
unchanged to yield 3.259 percent.
 (Reporting by Ka Yan Ng and Jennifer Kwan; editing by Rob
Wilson)