CANADA FX DEBT-C$ gains on U.S. data; revised domestic jobs data in focus

Thu Aug 14, 2014 4:16pm EDT

* Canadian dollar at C$1.0903 vs US$, or 91.72 U.S. cents
    * Bond prices higher across the maturity curve

 (Adds strategist comment, updates prices to close)
    By Alastair Sharp
    TORONTO, Aug 14 (Reuters) - The Canadian dollar gained
against its U.S. counterpart on Thursday, with the greenback
under some pressure after data showed the number of Americans
filing new unemployment benefits rose more than expected last
week.
    The loonie, as Canada's currency is colloquially known,
could strengthen further on Friday if an unprecedented revision
to July employment data shows more jobs were created than first
thought, one strategist said.
    The July version of Canada's market-moving jobs report
contained an error and must be restated, the country's main
statistics agency said on Tuesday. 
    The initial report showed the economy added just 200 jobs
last month, far fewer than expected. 
    "Because it was so out of line on the downside my guess
would be that it (the revision) has to be up, it was such a poor
report, especially on the full-time jobs," said Adam Button, a
currency analyst at ForexLive in Montreal.
    Given that assumption, Button said the currency looks cheap
at current levels and would still be attractive at C$1.08.
    "We took a run at C$1.10 on the poor (initial) jobs data and
couldn't get through. To me, that says the weakness in the
Canadian dollar is probably done for August," he said.
    The Canadian dollar, was last trading at C$1.0903
to the U.S. dollar, or 91.72 U.S. cents. That was stronger than
Wednesday's close of C$1.0917, or 91.60 U.S. cents.
    It had traded in the mid-C$1.06 range in early July but had
weakened steadily since then before making the move on C$1.10
last week.
    The U.S. jobless claims data on Thursday followed
unexpectedly flat U.S. retail sales figures a day earlier, which
came in with the weakest reading since January. 
 
    "We have generally had a weaker U.S. dollar, that is largely
behind the story on what we've seen on Canada," said Mark
Chandler, head of Canadian fixed income and currency strategy at
Royal Bank of Canada.
    Investors will also digest other Canadian data on Friday in
assessing the health of the domestic economy, with existing home
sales and manufacturing sales data both on tap.
    Canadian government bond prices were higher across the
maturity curve, with the two-year up 1.3 Canadian
cents to yield 1.063 percent, and the benchmark 10-year
 climbing 21 Canadian cents to yield 2.052 percent.

 (Additional reporting by Solarina Ho; Editing by Peter Galloway
and James Dalgleish)
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