TORONTO (Reuters) - The Canadian dollar held near six-week highs against its U.S. counterpart in early trade on Wednesday as weaker-than-expected U.S. employment data took some strength from the U.S. dollar and global stock markets sat tight awaiting policy news.
The Canadian currency pushed through a weeks-old trading range between C$1.02 and C$1.04 against the U.S. dollar to hit C$1.0125 on Tuesday, its strongest point since February 20. Traders said it was unlikely to go much higher on Wednesday, barring a major surprise in the U.S. services ISM data due out later in the day.
Earlier on Wednesday, 5he ADP National Employment Report showed 158,000 private sector jobs were added to the U.S. economy in March, far less than economists had expected. The February report was revised upward by 39,000.
“The U.S. is looking a little less robust today in the wake of the data we’ve seen in last half hour - the ADP,” said Jeremy Stretch, head of foreign exchange strategy in London for CIBC World Markets.
“So we’ve seen a small grind lower but unless can break through C$1.0125 it is still essentially range trading.”
At 9:26 a.m. (1326 GMT) the Canadian dollar was trading at C$1.0130 to the greenback, or 98.72 U.S. cents, up slightly from Tuesday’s North American session close at C$1.0149, or 98.53 U.S. cents.
Stretch said he expects the currency to trade in a range of C$1.0125 to C$1.0165 barring a surprise reading in the U.S. services ISM data. Even then, he expects the currency will remain within a C$1.01 and C$1.0195 range.
The price of Canadian government debt was higher across the curve, with the two-year bond up 6 Canadian cents to yield 1.001 percent, and the benchmark 10-year bond rising 13 Canadian cents to yield 1.861 percent.
Editing by W Simon