CANADA FX DEBT-C$ fall blunted as oil snaps losing streak
(Adds closing figures, comment and details) * Canadian dollar at C$1.1836 or 84.49 U.S. cents * Bond prices mixed across the maturity curve By Solarina Ho TORONTO, Jan 8 (Reuters) - The Canadian dollar was modestly weaker against its U.S. counterpart on Thursday as oil prices stabilized on better than expected U.S. economic data and falling U.S. crude stockpiles. Global oil prices were little changed, with Brent crude just above $50 a barrel, after tumbling more than 50 percent since June as Saudi Arabia and other oil-producing countries have resisted production cuts despite excess supply and waning demand. Canada is a major crude exporter, and the Canadian dollar has been highly sensitive to the sharp price declines. "After really holding its own in late December ... the first couple of days of the year we saw (the Canadian dollar) give that up," said Amo Sahota, director at Klarity FX in San Francisco, noting the correlation between the moves of oil and the loonie is at its strongest in quite some time. Market participants have been searching for a bottom for oil prices and many think the pause in crude's fall will be short-lived. "(Forty-dollar oil) would mean more Canadian dollar weakness," Sahota said. "We just think the current pace of Canadian dollar weakness is over-extended." The Canadian dollar, which retreated more than 1.5 percent since the new year to 5-1/2 year lows, closed at C$1.1836 to the greenback, or 84.49 U.S. cents. That was weaker than Wednesday's finish of C$1.1820, or 84.60 U.S. cents. In the latest sign of a strong U.S. economy, the number of Americans filing new claims for unemployment benefits fell last week and job cuts declined sharply in December, suggesting a tightening labor market. Camilla Sutton, chief currency strategist at Scotiabank, noted that the strength of the greenback has been a dominant factor in the currency market. "All in all CAD's been pushed and pulled by market trends," she said. "There's still a lot of U.S. dollar strength as the overarching theme for most currencies. Canada is just hovering in between." Investors were also awaiting employment figures for December for the United States and Canada, which are due on Friday. Forecasters polled by Reuters expected 15,000 new jobs in Canada with the unemployment rate unchanged at 6.6 percent. Canadian government bond prices were mixed across the maturity curve with longer-term maturities falling. The two-year fell 3 Canadian cents to yield 0.982 percent and the benchmark 10-year declined 45 Canadian cents to yield 1.706 percent. (Reporting by Solarina Ho; Editing by Peter Galloway)
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