Canadian dollar weakens after soft trade data

Thu Sep 11, 2008 10:16am EDT
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* Canada's July trade surplus falls short of expectations

* Lower oil prices also weighing on Canadian dollar

* Bond prices bounce back after the previous session's drop

By Frank Pingue

TORONTO, Sept 11 (Reuters) - The Canadian dollar fell versus the U.S. dollar on Thursday after data showed Canada's trade surplus narrowed more than expected in July.

Domestic bond prices were higher across the curve alongside the bigger U.S. Treasury market given the Canadian data and a report that showed the number of U.S. workers filing first-time claims for jobless benefits was higher than expected.

At 9:30 a.m. (1330 GMT), the Canadian unit was at C$1.0732 to the U.S. dollar, or 93.18 U.S. cents, down from C$1.0697 to the U.S. dollar, or 93.48 U.S. cents, at Wednesday's close.

The Canadian dollar was knocked back and forth early in the session as the market was torn between unloading the currency on the weaker domestic data or selling the U.S. dollar after a report showing a wider U.S. trade deficit for July.

After the two reports, the Canadian dollar bounced around in a range of C$1.0743 to the U.S. dollar, and C$1.0700 to the U.S. dollar before finally settling below its pre-data level.   Continued...