CANADA FX DEBT-C$ gets a respite after recent slide to 4-yr low
* Canadian dollar at C$1.0846 or 92.20 U.S. cents * Bond prices mixed across the maturity curve By Leah Schnurr TORONTO, Jan 13 (Reuters) - The Canadian dollar strengthened against the greenback on Monday, consolidating after last week's rout as a lack of domestic economic news this week was expected to give the loonie a reprieve. The loonie got an additional boost in midmorning after a Bank of Canada survey found businesses were hopeful in the fourth quarter that sales would increase over the next year. Canadian firms were also more upbeat on investment and hiring. Canada's currency lost ground every day last week and touched a more than four-year low on Friday after data showed the country's economy unexpectedly shed jobs in December. The jobs report fueled expectations the Bank of Canada will maintain its recent dovish stance, one of the factors that is seen keeping pressure on the loonie in 2014. Still, the swiftness of the currency's selloff may prompt markets to take a pause. The Canadian dollar also benefited from a weaker greenback on Monday as disappointing jobs growth in the United States prompted investors to reassess how quickly the Federal Reserve could wind down its stimulus program. "Canada has gained a little bit of ground back on what we'd seen as a pretty heavy selloff over the past couple weeks," said Don Mikolich, executive director of foreign exchange sales at CIBC World Markets in Toronto. Even so, the day's strength was likely just a break before the loonie heads lower again, Mikolich said. "It's hard to see any kind of material appreciation in the Canadian dollar much below C$1.0780, C$1.0730. Those would seem to be fairly decent support levels at this stage, unless we got some other interesting numbers." The Canadian dollar ended the North American session at C$1.0846 to the greenback, or 92.20 U.S. cents, stronger than Friday's close of C$1.0901, or 91.73 U.S. cents. The Canadian economic calendar is light this week, while south of the border investors will parse reports including retail sales and the consumer price index. U.S. data that comes in on the soft side could benefit the loonie, analysts said. "It's pretty much dire straits for the loonie, everyone has definitely been piling on the short Canadian dollar trade," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. "I think it's very likely this week we'll see a bit of consolidation in the loonie." Attention will also be turning to the Bank of Canada's interest rate decision and policy statement that will be released next week. "I think that with the data we've seen over the past two weeks, the Bank of Canada could definitely get a little more dovish" in the statement's language, said Smith. Canadian government bond prices were mixed across the maturity curve, with the two-year off 5 Canadian cents to yield 1.039 percent. The benchmark 10-year was up 12 Canadian cents to yield 2.543 percent.
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