CANADA FX DEBT-C$ recovers after recent sell-off; jobs in view
* Canadian dollar at C$1.1219 or 89.13 U.S. cents * Bond prices mixed across the maturity curve By Leah Schnurr TORONTO, Oct 6 (Reuters) - The Canadian dollar firmed against the greenback on Monday, backing away from the more than six-month low hit last week as the currency took a breather and investors looked ahead to key domestic jobs data later in the week. A sharp drop on Friday had put the loonie within striking distance of testing the low for 2014 so far at C$1.1279, which was seen in March. Its failure to reach that level could give the currency some positive momentum in the short term. The loonie was also boosted by a pullback in the U.S. dollar after 12 consecutive weeks of gains. But analysts expect the currency pairing will return to the trend it has seen over the last three months as expectations the Federal Reserve is moving closer to raising interest rates lift the greenback, to the detriment of the Canadian dollar. "It's hard to argue against further upside potential for the (U.S. dollar-Canadian dollar) pair, just because you've got diverging monetary policies between the U.S. and Canada," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. "The U.S. is going to look to raise rates sooner than Canada will and there's still some mediocre data we have to muddle along through before we see our export sector gain the needed traction and robust growth to help the loonie gain back some of its losses." The Canadian dollar was at C$1.1219 to the greenback, or 89.13 U.S. cents, stronger than Friday's close of C$1.1259, or 88.82 U.S. cents. On the data front, investors will take in a handful of reports on the housing sector this week, but the main economic event will be the labor market report for September due on Friday. Employers are expected to pick up the pace of hiring by creating 20,000 new positions last month, more than recovering the 11,000 jobs lost in August. The unemployment rate is seen holding at 7 percent. Canadian government bond prices were mixed across the maturity curve, with the two-year up 1-1/2 Canadian cents to yield 1.121 percent, while the benchmark 10-year was down 8 Canadian cents to yield 2.101 percent. (Editing by Meredith Mazzilli)
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