CANADA FX DEBT-C$ holds near par, economic optimism helps
* Canadian dollar inches up to 99.99 U.S. cents
* Bonds mixed, tracking U.S. Treasury prices
TORONTO, Dec 30 (Reuters) - Canada's dollar held near par with a broadly easing U.S. dollar on Thursday in quiet trade, shrugging aside softening crude oil prices as the long-term outlook on the U.S. economy helped the commodity-influenced currency.
At 9:20 a.m. (1320 GMT), the Canadian dollar was at C$1.0001 to the U.S. dollar, or 99.99 U.S. cents, up slightly from C$1.0006 to the U.S. dollar, or 99.94 U.S. cents, at Wednesday's close.
The U.S. dollar weakened broadly as traders took a drop in U.S. bond yields as a cue to sell. [FRX/]
Overnight, the Canadian dollar tracked gains in other commodity-based currencies, the New Zealand and Australian dollars, on broad-based strength in global commodity prices.
As the price of crude oil retreated below $91 a barrel, the Canadian dollar pared gains but held within ticks to par with the U.S. dollar as it has all week.
It has yet to close a session at or above par since November. The Canadian dollar has reached a one-for-one footing with the U.S. currency a handful of times this year but has not sustained that level for long.
Mounting confidence about the U.S. economy should help support the Canadian dollar as well because Canada's export-oriented economy is highly tied to the health of the United States.
"Markets are thin, but the underlying economic optimism should contribute to more (U.S.) dollar selling heading into the new year," said Jack Spitz, managing director of foreign exchange at National Bank Financial. He said the Canadian dollar could again test the recent peak at 99.75 Canadian cents to the U.S. dollar, its highest since late April.
Short-dated Canadian government bond prices eased, tracking U.S. Treasuries, as jobless data suggested the U.S. labor market recovery was gaining strength.
New U.S. claims for unemployment benefits dropped more than expected last week to their lowest level in more than two years. [ID:nN3097646]
The two-year bond CA2YT=RR slipped 3 Canadian cents to yield 1.710 percent. But longer-dated issues were slightly firmer with equity markets indicating a soft open. The 10-year bond CA10YT=RR rose 11 Canadian cents to yield 3.147 percent.
(Reporting by Ka Yan Ng; Editing by Padraic Cassidy)
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