CANADA FX DEBT-C$ notches slim gains, BoC limits move

Wed Jun 2, 2010 8:11am EDT

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 * C$ at C$1.0536 to the U.S. dollar, or 94.91 U.S. cents
 * Bond prices softer across curve
 By Jennifer Kwan
 TORONTO, June 2 (Reuters) - The Canadian dollar firmed
slightly against the U.S. dollar on Wednesday but was largely
caught in a trading range as equity and commodity markets gave
mixed signals, providing little reason for investors to make
big bets either way.
 At 7:42 a.m. (1142 GMT), the Canadian dollar CAD=D4 was
at C$1.0536 to the U.S. dollar, or 94.91 U.S. cents, slightly
stronger than its Tuesday finish at C$1.0540 to the U.S.
dollar, or 94.88 U.S. cents.
 "Markets are very mixed this morning," said Camilla Sutton,
currency strategist at Scotia Capital, noting that typically
provides little guidance for moves in the currency. "I think
overall we have another spike in risk aversion."
 The yen fell on Wednesday, unsettled by the Japanese prime
minister's resignation, while world equities and commodity
prices sagged on concerns about the impact of the euro zone
debt crisis on global growth.
 However, U.S. stock index futures signaled a higher open.
[MKTS/GLOB] [.N]
 There was also a slight overhang from the Bank of Canada,
which on Tuesday became the first Group of Seven central bank
to raise interest rates since the financial crisis began,
pulling up its benchmark overnight rate to 0.50 percent, a move
highly anticipated by the market.
 But the central bank gave no indication that more hikes
were on the way, causing the Canadian dollar to slump.
[ID:nN01103957] [ID:nN01264788] [ID:nN01123836]
 "The statement was dovish so that really doesn't create a
rally today," said Sutton, who noted the currency has been
recently stuck in a trading range of C$1.0552 to C$1.0573
against the U.S. dollar.
 With limited data on tap, the market will focus on Friday's
employment data, said Sutton. In Canada, the median forecast of
22 analysts is for a net gain of 12,500 jobs in May after a
record gain of 108,700 in April. The median forecast for the
unemployment rate is 8.1 percent. [ID:nECICA]
 Canadian bond prices were lower across the curve, mimicking
moves in U.S. Treasuries where prices fell as investors booked
profits a day after a slide on Wall Street, trimming long
positions ahead of key employment data due later in the week.
[US/]
 The two-year Canadian government bond CA2YT=RR sagged 2
Canadian cents to yield 1.720 percent, and the 10-year bond
CA10YT=RR fell 15 Canadian cents to yield 3.305 percent.
 (Reporting by Jennifer Kwan; Editing by Theodore d'Afflisio)





















































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