* C$ firms to C$0.9589, or $1.0429
* Bonds mixed; ECB hikes interest rates
* Currency expected to trade between C$0.9560 and C$0.9620
By Solarina Ho
TORONTO, April 7 (Reuters) - The Canadian dollar was stronger against the greenback on Thursday, holding above the $1.04 mark, as oil prices held steady and traders firmed their positions in advance of Friday's employment data.
Canada created an average of 40,000 jobs per month over the last five months -- a recovery that's been faster than its neighbors to the south -- but with February's lackluster gains, market watchers are keen to see if the lull was temporary. [ID:nN01139782]
At 8:18 a.m. (1219 GMT), the currency CAD=D4 stood at C$0.9589 to the U.S. dollar, or $1.0429, higher than Wednesday's North American finish C$0.9604 to the U.S. dollar, or $1.0412.
"The Canadian dollar is still well bid by the foreigners," said C.J. Gavsie, managing director of foreign exchange sales at BMO Capital Markets.
Oil, a key Canadian export, have held steady above $108, which has also helped support the currency. [O/R]
"I do think the correlation factor is going to continue having us see further strength in the Canada dollar," said Gavsie.
With little key data to drive direction on Thursday, the currency is expected take its cue from oil and equities markets. The Canadian dollar is seen trading between a range of C$0.9560 and C$0.9620.
Gavsie said corporate activity, including mergers and acquisitions, could also influence the currency.
"You could see a little bit of a sell-off of Canadian (dollars) in the coming days," said Gavsie, noting that as deals close, investors in acquired companies are receiving Canadian dollars.
"There are a lot of foreign holders that were previous owners of those Canadian companies. They'll be repatriating some of their funds back to their own currency. so I think some of that will be felt."
Canadian government bond prices were mixed across the curve, with shorter-term bonds ticking higher and prices of longer-term bonds falling. A European Central Bank interest rate hike reinforced views of tighter monetary policy world-wide. [ID:nLDE7351QH]
The two-year bond CA2YT=RR was up 1 Canadian cent to yield 1.879 percent, while the 10-year bond CA10YT=RR gave back 28 Canadian cents to yield 3.427 percent. (Editing by Padraic Cassidy)