CANADA FX DEBT-C$ firms after Canada growth data; U.S. jobs eyed

Thu Jan 31, 2013 4:47pm EST

* C$ at C$0.9973 versus US$, or $1.0027
    * Canada GDP data for November slightly better than expected
    * Still near 13-month low vs euro
    * Attention turns to U.S. jobs data out on Friday

    By Solarina Ho
    TORONTO, Jan 31 (Reuters) - The Canadian dollar notched
gains after the release of stronger-than-expected domestic
growth data on Thursday, rising above the value of its U.S.
counterpart for the first time this week, even as traders eyed
the key U.S. jobs report out on Friday.
    Data on Thursday showed Canada's economy grew faster than
expected in November, rising 0.3 percent after a tepid 0.1
percent rise in October and no gain in September.
 
    "We've had very long stretch of weak numbers. Since the
summer, growth in terms of GDP has been relatively weak. It
helps to signal that the economy could be improving, the problem
is, it's still too early," said Charles St-Arnaud, economist and
currency strategist in New York.
    U.S. data including a surge in personal income and a pick-up
in the U.S. Midwest business activity also helped. The U.S.
economy is the top destination for Canadian exports.
  
    The Canadian dollar finished the North American
session at C$0.9973 to the greenback, or $1.0027, compared with
C$1.0015, or 99.85 U.S. cents, at Wednesday's North American
close.
    The Canadian dollar has gained about 0.5 percent against the
greenback this week. But for the month it is still about 0.5
percent weaker. The currency sank last week after the Bank of
Canada surprised markets by saying an interest rate increase is
less imminent.
    The weekly gain could be threatened if U.S. jobs data due
out on Friday comes in weaker than expected. 
    "The Canadian dollar is as vulnerable, if not more so, to
U.S. economic weakness (as the U.S. dollar is)," said Jack
Spitz, managing director of foreign exchange at National Bank
Financial. "Ultimately if we see a soft payroll number tomorrow
we could see some (U.S.) dollar strength against Canada."
    Against the greenback, some of the Canadian currency's gain
on Thursday could be attributed to month-end selling of U.S.
dollars by fund managers with hedged portfolios following recent
global equity gains, Spitz added.
    The Canadian dollar also made gains against the euro after
sliding to a 13-month low against the currency on Wednesday.
.
    The price of the two-year Canadian government bond
 was up half a Canadian cent to yield 1.163 percent,
while the benchmark 10-year bond rose 6 Canadian
cents to yield 1.989 percent.
FILED UNDER:
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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