(Refiles to remove the word CORRECTED from the headine. The
report is not corrected)
* C$ at C$0.9774 vs US$, or $1.0231
* Bond prices flat to lower across curve
* Canada economy shrinks in Q2, first time since recession
* Canada's June GDP shows rebound from May
* U.S. private sector jobs data weaker than expected
(Updates to midday)
TORONTO, Aug 31 (Reuters) - The Canadian dollar was little
changed against the greenback in choppy trade on Wednesday,
pushed up by stronger equities despite weak North American
economic data and the likelihood of U.S.-dollar positive flows
In Canada, data showed the economy shrank in the second
quarter -- the first quarterly fall since the 2008-09 recession
-- largely due to temporary factors such as the earthquake and
tsunami in Japan in March. However, growth in June rebounded
after falling in May. [ID:nN1E77U099].
"The rise in the Canadian dollar was counterintuitive with
the GDP data," said Jack Spitz, managing director of foreign
exchange at National Bank Financial, noting U.S. private sector
employment data for August was also soft heading into the
closely watched U.S. nonfarm payrolls release on Friday.
Sal Guatieri, senior economist at BMO Capital Markets,
noted that Canada's better-than-expected June GDP data helped
cushion the blow from the disappointing quarterly figure,
raising hopes that the economy is bouncing back in the third
The domestic data did little to change the view that the
Bank of Canada will not increase rates until next year.
Eeconomists and strategists in a Reuters poll of released
on Wednesday forecast that the central bank will wait until at
least the second quarter of next year to hike rates as global
monetary policy stays accommodative due to slow economic
At 11:46 a.m. (1546 GMT), the Canadian dollar
at C$0.9774 to the U.S. dollar, or $1.0231, up slightly from
Tuesday's North American session close of C$0.9782 to the U.S.
dollar, or $1.0223.
Positive North American equities helped the currency push
higher, with U.S. stocks up more than 1 percent after the soft
jobs data boosted hopes the U.S. Federal Reserve would act
again to stimulate the economy. [.N] [.TO]
National's Spitz added that financial flows on Wednesday
should be U.S.-dollar positive because equity prices dropped in
"There has been a recovery of sorts in the underlying
equity markets, but still, on a month-to-month basis, portfolio
hedgers will certainly in theory at the very least be needing
to buy back U.S. dollars to compensate for the drop in
underlying valuations," Spitz said.
He noted significant U.S. dollar support at the 50- and
100-day moving average around C$0.9700 and no major U.S.-dollar
resistance until above C$0.99 to parity, due to recent
Canadian bond prices were flat to lower across the curve,
following U.S. Treasuries. [US/]
The two-year bond
was flat to yield 1.028
percent, while the 10-year bond slipped 19 Canadian
cents to yield 2.424 percent.
(Editing by Peter Galloway)