CANADA FX DEBT-C$ ekes out gains as commodities recoup some losses

Thu Apr 18, 2013 4:46pm EDT

* C$ at C$1.0260 vs US$, or 97.47 U.S. cents
    * U.S. jobless claims help ease concerns over job market
    * Friday's Canadian inflation data in focus
    * Bond prices mixed

    By Solarina Ho
    TORONTO, April 18 (Reuters) - The Canadian dollar was
modestly stronger against its U.S. counterpart on Thursday,
tracking commodity markets that recouped some of this week's
heavy losses.
    Global markets took a pause amid a lack of major economic
news and data after selling off sharply this week on concerns
about the global economic outlook. 
    "Broadly speaking, a little bit of a recovery today because
of the over-reaction of what we saw yesterday in currency
markets. The themes are still the same: Oil, commodities, China,
global growth and interest rates," said Rahim Madhavji,
president at commercial foreign exchange dealing firm
Knightsbridge Foreign Exchange.
    "If you can predict those, you can predict the loonie. In
the short term, the loonie is still seeing a lot of headwind ...
Today, it's just fluttering around, really looking for
direction."
    The Canadian dollar, which stayed within a narrow range for
most of the North American session, finished at C$1.0260 versus
the U.S. dollar, or 97.47 U.S. cents. This was stronger than
Wednesday's close at C$1.0266, or 97.41 U.S. cents.
    The currency sank earlier this week as commodity prices
plunged on weaker-than-expected Chinese data. 
    It also weakened against its U.S. counterpart on Wednesday
after the Bank of Canada chopped its growth forecasts, although
losses were limited by the bank holding to its view that
interest rates would need to rise at some point. 
    On Thursday, Brent crude oil gained more than 1 percent and
snapped a six-day losing streak, with dealers saying it looked
oversold. 
    "It's slightly improved risk sentiment. It follows almost
three or four days of very negative sentiment," said Charles
St-Arnaud, economist and currency strategist at Nomura
Securities in New York.
    Gold prices also rose in volatile trading, though overall
sentiment remained jittery. 
    U.S. data showed the number of Americans filing new claims
for unemployment benefits rose only slightly last week, holding
near a level economists normally associate with average monthly
job gains of more than 150,000. This helped ease concerns of a
deterioration in labor market conditions. 
    Canadian inflation data on Friday, which is expected to be
very tame, is the only major economic report remaining this
week. 
    Canadian government bond prices were mixed, with the
two-year bond shedding 1.5 of a Canadian cent to
yield 0.940 percent, while the benchmark 10-year bond
 climbed 9 Canadian cents to yield 1.704 percent.
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