* C$ at 97.21 U.S. cents
* JPMorgan results ease fears about U.S. financial sector
* Bonds slightly lower
By John McCrank
TORONTO, July 15 (Reuters) - The Canadian dollar rose against a soft U.S. dollar on Thursday as equity markets firmed and helped give a bid to oil prices.
JPMorgan, the first of the major U.S. banks to post second-quarter results, reported profits that beat analysts’ expectations and said credit losses broadly were slowing. [ID:nN13247761]
That eased fears about the strength of the U.S. financial sector and sent both U.S. stock futures and European equity markets higher.
The positive sentiment helped oil climb above $77 a barrel. Canada is the No. 1 exporter of oil to the United States. [O/R]
The bounce in equities helped crude prices reverse earlier losses triggered by data that showed more moderate economic growth in China, the world’s second biggest oil consumer. [ID:nTOE66D06L]
“The market seems to feel cautiously good today,” said Eric Lascelles, chief Canada macro strategist at TD Securities.
“But those are still pretty tentative sentiments and I’m sure that they will either crystallize or vanish all together based on some of the economic data coming down the pipe,” he said referring to the data out of China.
At 8:10 a.m. (1210), the Canadian dollar CAD=D4 was at C$1.0287 to the U.S. dollar, or 97.21 U.S. cents, rising from C$1.0382, or 96.32 earlier in the session. The currency ended Wednesday’s North American session at C$1.0341 to the U.S. dollar, or 96.70 U.S. cents.
Gold prices were firmer after the China data, rising to around $1,213 an ounce on a safe haven bid, which had initially been fueled by U.S. Federal Reserve comments released on Wednesday saying additional steps may be needed to shore up the soft U.S. economy. [GOL/] [MET/L] [ID:nN14148574]
The dovish Fed comments also weakened the U.S. dollar, which fell to a two-month low against the euro and a basket of currencies. [ID:nLDE66E17A]
The next key Canadian-driven event for the market will be the Bank of Canada’s interest rate announcement on July 20, and market expectations are leaning toward a rate increase.
Canadian primary dealers and global forecasters surveyed by Reuters said the Bank of Canada will raise its key overnight interest rate next week, but that the pace of subsequent hikes is less clear. [CA/POLL]
In a separate poll, economists said Canada’s economy will expand at a fast enough clip this year to prompt the Bank of Canada to continue raising rates, but growth is expected to slow in 2011. [ECILT/CA]
Canadian government bond prices edged lower on Thursday as investors cautiously embraced the riskier, but potentially more lucrative equities market.
The two-year bond CA2YT=RR was down 3 Canadian cents to yield 1.726 percent, while the 10-year bond CA10YT=RR fell 22 Canadian cents to yield 3.290 percent. (Reporting by John McCrank)