CANADA FX DEBT-C$ slips ahead of U.S., Canada jobs data

Fri Dec 7, 2012 8:06am EST

* C$ down to C$0.9932 vs US$, or $1.0068 in narrow range
    * Canada bond prices creep up across the curve

    By Claire Sibonney
    TORONTO, Dec 7 (Reuters) - The Canadian dollar eased against
the U.S. dollar in early trading on Friday following three
straight days of gains, but moves were limited ahead of jobs
reports from both Canada and the United States.
    Economists expect the United States to have added 93,000
jobs and Canada to have added 10,000 jobs. 
 Both releases are due at 8:30 a.m. (1330 GMT).
    "Unless we're really far off expectations ... the U.S. is
going to overshadow Canada," said David Bradley, director of
foreign exchange trading at Scotiabank.
    "If the U.S. comes in quite a bit stronger, it's probably
going to be a risk-on environment, so you're going to see the
U.S. dollar sell off, equities rally, and you should see
commodity currencies do better."
    Until then, the currency was seen taking cues from global
equities, which also edged lower on uncertainty over U.S. budget
plans and the darkening outlook for the European economy. 
 
    Germany's central bank said it expected Europe's largest
economy to grow just 0.4 percent in 2013, and pointed to risks
of a recession as the euro zone debt crisis takes its toll.
 
    At 7:50 a.m., the Canadian dollar stood at C$0.9932
versus the greenback, or $1.0068, compared with Thursday's North
American session close at C$0.9911, or $1.0090 U.S. cents. The
currency was trading in a tight range between C$0.9910-C$0.9934.
    Canada's dollar hit a one-month high in the previous
session, building on gains from earlier in the week after the
Bank of Canada kept its bias towards future rate hikes.
 
    Bradley said U.S. dollar support was seen around Thursday's
low of C$0.9892 and resistance near C$0.9955-C$0.9965.
    "There are plenty of corporate offers around on the top side
now, sovereign type names as well looking to sell (U.S.)
dollar/Canada towards C$0.9950. We'd have to get a really
negative number for dollar/Canada to trade through that level,"
he said.
    Canadian bond prices crept up across the curve, with the
two-year bond rising 2 Canadian cents to yield 1.033
percent, and the benchmark 10-year bond climbing 13
Canadian cents to yield 1.679 percent.
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