CANADA FX DEBT-C$ little changed, focus on jobs data ahead

Thu Apr 3, 2014 4:37pm EDT
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* Canadian dollar at C$1.1039 or 90.59 U.S. cents
    * Bond prices mixed across the maturity curve

 (Adds details, quote, updates prices)
    By Leah Schnurr
    TORONTO, April 3 (Reuters) - The Canadian dollar was little
changed against the greenback on Thursday as data showing the
country reported a small trade surplus in February for the first
time in five months was not enough to help the currency hold on
to earlier gains.
    Investors were also turning their attention to labor market
reports on both sides of the border at the end of the week,
leaving the currency to consolidate after a recent run higher.
    The trade surplus stood at C$290 million ($264 million),
coming in better than analysts expected as exports rose to their
highest level since before the 2008 recession. Still, January's
trade balance was revised lower. 
    While the strength in exports and imports was encouraging,
the figures did not yet show significant improvement, said Mark
Chandler, head of Canadian fixed income and currency strategy at
Royal Bank of Canada in Toronto.
    "We're still expecting more from exports for the quarter as
a whole," said Chandler.
    The export sector has been a focal point for the Bank of
Canada, with central bank head Stephen Poloz calling the
sector's performance "disappointing". 
    "There's some very early signs that we might be seeing the
positive benefits of a weaker loonie on trade, but it's still
relatively early and it does take some time for that to make its
way through the rest of the economy," said Mazen Issa, senior
Canada macro strategist at TD Securities in Toronto.
    The Canadian dollar ended the North American
session at C$1.1039 to the greenback, or 90.59 U.S. cents,
slightly weaker than Wednesday's close of C$1.1035, or 90.62
U.S. cents.
    Overseas, the European Central Bank kept interest rates
steady but the euro was lower against the Canadian
dollar after the ECB opened the door to the use of
unconventional measures to keep inflation from staying too low.
    Employment reports in both Canada and the United States will
set the tone for trading on Friday morning. In Canada, hiring is
expected to have picked back up in March after the economy shed
jobs in February.
    Canadian government bond prices were mixed across the
maturity curve, with the two-year off 0.8 Canadian
cent to yield 1.101 percent and the benchmark 10-year
 up 7 Canadian cents to yield 2.544 percent.

 (Editing by Andrew Hay)