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TORONTO (Reuters) - The Canadian dollar was little changed against the U.S. dollar on Thursday as traders bided their time ahead of the key domestic jobs report due on Friday ahead of next week's Bank of Canada rate announcement.
Domestic bond prices, with no Canadian data to influence a move, followed the bigger U.S. Treasury market lower across the curve after data south of the border showed jobless claims fell in the latest week.
At 9:15 a.m., the Canadian unit was at C$1.0109 to the U.S. dollar, or 98.92 U.S. cents, up from C$1.0111 to the U.S. dollar, or 98.90 U.S. cents, at Wednesday's close.
The Canadian dollar stuck in a tight range throughout the overnight session as traders avoided huge commitments until they get to see how the Canadian job market fared in June.
The June employment figures, the last piece of data the Bank of Canada will consider ahead of its next scheduled rate decision on July 15, are expected to show the economy created 10,000 jobs in June with an unemployment rate of 6.1 percent.
"Basically we're waiting for the employment data tomorrow," said David Bradley, director of foreign exchange trading at Scotia Capital. "The Canadian dollar for the last week or two has been ... trading on its own and hasn't really been paying to much attention to the fundamentals."
In recent weeks there have been sessions where the Canadian dollar has closed near its session high even as the Toronto Stock Exchange's main index dropped sharply. Even oil prices, which rose to a record high and then slammed lower, have only played a minor role in the currency's direction.
Next week's Bank of Canada rate announcement is not likely going to knock the Canadian dollar form its recent range given the light summer trading volumes, analysts say.
While the bank is expected to leave its key overnight rate steady at 3.00 percent, plenty of attention will be put on the accompanying statement to see if the emphasis will remain on the risk of accelerating inflation.
If it does, that could suggest an early rate increase, a suggestion that may bolster the Canadian currency, analysts say.
Canadian bond prices weakened a touch after data showed the number of U.S. workers filing new claims for jobless benefits fell last week, which sapped demand for more secure assets like government debt.
But the move was held in check ahead of words from Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Henry Paulson who testify at 10:00 a.m. on regulatory restructuring on Capitol Hill.
"Bonds might get some support tomorrow as we're looking at a fairly soft Canadian employment number and some risk of an outright decline given the pronounced weakness in the auto sector in Ontario," said Sal Guatieri, senior economist at BMO Capital Markets.
The overnight Canadian Libor rate was 3.0450 percent, up from 3.0416 percent on Wednesday.
The two-year bond was down 2 Canadian cents at C$101.02 to yield 3.185 percent. The 10-year bond was off 3 Canadian cents at C$102.36 to yield 3.682 percent.
The yield spread between the two-year and 10-year bond was 49.7 basis points, down from 49.8 at the previous close.
The 30-year bond fell 18 Canadian cents to C$115.87 for a yield of 4.061 percent. In the United States, the 30-year treasury yielded 4.428 percent.
The three-month when-issued T-bill yielded 2.44 percent, down from 2.46 percent at the previous close.
Reporting by Frank Pingue; Editing by Frank McGurty