TORONTO (Reuters) - The Canadian dollar was flat versus the U.S. dollar on Thursday and appeared unlikely to get a chance to reclaim losses suffered earlier this week given the absence of any domestic data to spark a move.
Domestic bond prices, with no domestic data to consider until next week, were mostly higher given a slate of data that continues to suggest the global economy is weakening.
At 9:10 a.m., the Canadian unit was at C$1.0100 to the U.S. dollar, or 99.01 U.S. cents, up from C$1.0103 to the U.S. dollar, or 98.98 U.S. cents, at Wednesday’s close.
The currency is down about 0.5 percent this week after data showed domestic spending has started to sink while the annual inflation rate rose more than expected in June.
But with an empty data calendar in Canada for the rest of the week, traders appeared content letting the Canadian dollar bounce back and forth in a tight range versus the greenback.
“The lack of domestic data and the flattish tone to both crude oil and gold are contributing to a consolidative session for the Canadian dollar,” said Jack Spitz, managing director of foreign exchange at National Bank Financial.
The Canadian dollar’s link to commodity prices has dwindled compared with last year when lofty prices for oil and gold were a key driver in the currency’s surge.
But Canada remains the top supplier of crude to the United States and moves in the commodity still have an impact on the currency, but now they are less seldom and less noticeable.
Oil prices were a bit firmer after sliding to a seven-week low while gold prices rose slightly as bargain hunters stepped in after they earlier hit a two-week low.
Canadian bond prices were higher on the short end of the curve as weak European data overnight highlighted slowing growth and cooled expectations of more interest rate rises.
That was followed by a U.S. report which showed jobless claims rose more than expected in the latest week.
And given the lack of any domestic events to inspire a move in bonds, dealers opted to take their cue from the bigger U.S. Treasury market.
“It’s largely a U.S. story. Plus there was a whole slate of weaker overseas data overnight,” said Sal Guatieri, senior economist at BMO Capital Markets. “Everything is kind of suggesting that the global economy is weakening and the U.S. labor market remains soft.”
The two-year bond was up 5 Canadian cents at C$101.00 to yield 3.185 percent. The 10-year bond rose 3 Canadian cents to C$103.28 to yield 3.846 percent.
The yield spread between the two-year and 10-year bond was 66.1 basis points, up from 63.1 basis points.
The 30-year bond was down 4 Canadian cents at C$114.01 for a yield of 4.161 percent. In the United States, the 30-year treasury yielded 4.664 percent.
The three-month when-issued T-bill yielded 2.47 percent, down from 2.48 percent at the previous close.
Editing by Scott Anderson