April 3, 2019 / 8:17 PM / 8 months ago

CANADA FX DEBT-C$ near flat as oil dips, investors brace for jobs report

 (Adds strategist quote and details on activity, updates prices)
    * Loonie trades in a range of 1.3297 to 1.3353
    * Price of U.S. oil falls 0.2%
    * Canadian bond prices decline across steeper yield curve

    By Fergal Smith
    TORONTO, April 3 (Reuters) - The Canadian dollar was little
changed against its broadly weaker U.S. counterpart on Wednesday
as oil prices fell and investors turned cautious on the loonie
ahead of Canadian jobs data due on Friday.
    Blockbuster Canadian job gains this year have helped bolster
investor sentiment for the loonie, offsetting other data showing
a slowdown in Canada's economy.    
    The domestic job numbers have been volatile in recent months
so now investors are bracing for disappointing data that could
put "downward pressure" on the currency, said Alfonso Esparza, a
senior currency analyst at OANDA.
    The Bank of Canada is unlikely to cut interest rates to
support a flagging economy as long as job growth continues at a
robust pace, an analysis of the central bank's response to past
divergences in economic data suggests.             
    The price of oil, one of Canada's major exports, dipped on
Wednesday after U.S. government data showed a surprise build in
crude inventories.             
    U.S. crude oil futures        settled 0.2 percent lower at
$62.46 a barrel, while the U.S. dollar declined against a basket
of major currencies as encouraging Chinese data and hopes of a
trade deal between the U.S. and China boosted risk appetite
globally.             
    At 3:50 p.m. (1950 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3338 to the greenback, or 74.97
U.S. cents. The currency's strongest level of the session was
1.3297, matching Monday's 11-day high, while its weakest was
1.3353.
    The only other G10 currencies not to advance against the
U.S. dollar were the yen        and the Swiss franc       .    
    Lack of progress for the loonie came one day after Canadian
Prime Minister Justin Trudeau sought to quell a crisis that
threatens his chances of re-election, expelling from party ranks
two former Cabinet members he said had undermined the ruling
Liberals.                 
    Canadian government bond prices were lower across a steeper
yield curve in sympathy with U.S. Treasuries. The two-year
           fell 5 Canadian cents to yield 1.588% and the 10-year
            was down 30 Canadian cents to yield 1.702%.
    Canada's 10-year yield rose 3.5 basis points further above
the yield on the 3-month T-bill to reach a spread of 3.7 basis
points, which could temper the recession concerns of some
investors.             
    Canada's curve inverted in March for the first time since
2007.

 (Reporting by Fergal Smith; Editing by Bernadette Baum and
Sandra Maler)
  
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