* C$ at $1.0510 to US$, or 95.15 U.S. cents
* Higher oil prices boost commodity-driven currency
* Buyers seek value following steep decline
* Shrinking trade deficit ignored as jobs data looms
By Cameron French
TORONTO, July 3 (Reuters) - The Canadian dollar gained
versus its U.S. counterpart on Wednesday, rebounding from
Tuesday's 21-month lows as strong oil prices lifted the
currency, while its recent decline enticed value seekers.
U.S. crude topped $100 a barrel for the first time since
September on concerns about Egyptian unrest and tight supplies.
Higher oil prices typically boost the Canadian
dollar because Canada is a major supplier of oil to the U.S.
market.
With activity muted ahead of the U.S. Independence Day
holiday on Thursday and the release of major jobs data on
Friday, buyers sought to take advantage of the currency's 3.4
percent slide since mid-June.
"It has moved a long way in a relatively short period of
time, and now that things have quieted down a little bit, people
are trying to pick away and look for some value," said Mark
Chandler, head of fixed income and currency strategy at RBC
Capital Markets.
The loonie, as Canada's currency is colloquially known, has
shed value in recent weeks as the U.S. Federal Reserve signals
its intention to scale back the asset purchases that have
supported equity and bond markets.
Meanwhile, uneven Canadian economic data has investors
continuing to wonder how soon the Bank of Canada will act on its
long-held threat to raise interest rates.
Chandler said he saw particular interest in the loonie among
Canadian corporate clients on Wednesday.
The Canadian dollar ended the session at C$1.0510
to the greenback, or 95.15 U.S. cents, compared with C$1.0549,
or 94.80 U.S. cents, at Tuesday's North American close.
Data showing a smaller than expected Canadian trade deficit
in May due to falling imports was largely ignored, traders said.
"The market obviously has got two things on its mind: July 4
tomorrow and jobless data on Friday," said Steve Butler,
director of foreign exchange trading at Scotiabank.
The employment numbers are expected show Canada lost some
2,500 jobs in June after notching oversized gains the previous
month, while the much larger U.S. economy is seen adding 165,000
jobs.
Prices for Canadian government debt were mixed. The two-year
bond rose 1 Canadian cent to yield 1.194 percent,
while the benchmark 10-year bond slid 6 Canadian
cents to yield 2.414 percent.