CANADA FX DEBT-C$ eases in choppy trade, bond prices soar

Thu Aug 18, 2011 9:25am EDT

* C$ sags to $0.9875 to the U.S. dollar, or $1.0127

* Bond prices surge for third straight session

By Ka Yan Ng

TORONTO, Aug 18 (Reuters) - Canada's dollar was weaker in choppy trading on Thursday morning after a raft of U.S. and Canadian data did little to offset an already glum economic world outlook.

The nervousness, however, sent government of Canada bond prices surging for a third straight session.

The currency fell to a session low at C$0.9880 to the U.S. dollar, or $1.0121, after U.S. jobless claims rose in the latest week and U.S. consumer prices rose faster than expected in July.

The Canadian dollar was also weighed by persistent unease about the sluggish global recovery, which was a chief factor that sent European shares lower. Cuts in global gross domestic product forecasts from big banks, as well as weak British retail sales data fanned growth concerns. [MKTS/GLOB]

The price of oil was also down on the day. Oil prices often influence the direction of Canada's commodity-linked currency.

"The first round of data was very uninspiring," said John Curran, senior vice president at CanadianForex. "Realistically, the major number there was the unemployment claims. CPI no one is going to care about until mid-2013."

At 9:12 a.m. (1412 GMT), the Canadian currency CAD=D4 was at C$0.9875 to the U.S. dollar, or $1.0127, down from C$0.9797 to the U.S. dollar, or $1.0207, at Wednesday's North American close.

Canada's two-year bond CA2YT=RR jumped 20 Canadian cents to yield 0.881 percent, while the 10-year bond CA10YT=RR advanced 65 Canadian cents to yield 2.319 percent.

Curran said there could be "some fireworks" after data at midmorning, which includes existing home sales for July and the Philadelphia Fed's business activity index for August. Both are due at 10 a.m. (1600 GMT).

Investors were unruffled by Canada's economic data released on Thursday, which showed a rise in July's leading indicator, a predictor of economic trends, while June wholesale trade also rose. [ID:nN1E77H046] [ID:nN1E77H09D] ( Reporting by Ka Yan Ng, Editing by W Simon )

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