CANADA FX DEBT-C$ ends weaker as world equities lose some shine

Thu May 9, 2013 4:35pm EDT
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* C$ ends at C$1.0075 vs US$, or 99.26 U.S. cents
    * Focus on Friday's jobs data; survey sees 15,000 new jobs
    * Bond prices mixed
    * Poll sees C$ weakening against US$ in year ahead

    By Andrea Hopkins
    TORONTO, May 9 (Reuters) - The Canadian dollar ended weaker
against its U.S. counterpart on Thursday after briefly touching
its strongest level in more than two months, with traders
looking to Friday's key domestic jobs report to set direction
for the currency.
    The Canadian currency took its direction from weaker prices
for some commodities and a pullback in global stock markets,
which slipped from recent record levels. 
    "We don't have much in the way of domestic drivers today.
The equity markets began to lose a bit of their steam, that was
the primary factor," said Mark Chandler, head of Canadian fixed
income and currency strategy at RBC Capital.
    "We've come a long way really, and we have a pretty
important release tomorrow."
    The Canadian dollar ended the North American
session at C$1.0075, or 99.26 U.S. cents, nearly half a cent
weaker than Wednesday's close of C$1.0033, or 99.67 U.S. cents. 
    The currency earlier in the session hit C$1.0014 to the U.S.
dollar, its strongest level in nearly three months. The Canadian
dollar had gained some 2-1/2 cents on the U.S. dollar since late
April before the afternoon retrenchment. 
    Over the longer term, the Canadian dollar is expected to
weaken against the greenback in the year ahead, according to a
Reuters poll published on Wednesday. Forecasters cited concern
about the economy's slow rate of growth compared with that of
the United States. 
    Chandler said focus is now on the Canadian employment report
due out on Friday, which is expected to show the economy added
15,000 jobs in April, according to a Reuters survey of analysts,
after a steep decline notched in March. 
    But he said even a strong report may not be enough to push
the currency to fresh highs, given that the Bank of Canada has
long said no rate hikes are on the immediate horizon.
    "We're in a bit of a limbo situation with the Bank of Canada
so it is really not about monetary policy. It's just about
risk-on, risk-off and whether generally North America is going
to look better in Q2," Chandler said.
    "We've had a good run of better data that had people
believing Q2 might be a bit of a pleasant surprise compared to
what they had thought. But a weaker number in the employment
data may take some shine off."
    Prices for Canadian government bonds were mixed. The
two-year bond was unchanged to yield 0.976 percent,
while the benchmark 10-year bond rose 5 Canadian
cents to yield 1.806 percent.