* Canadian dollar at C$1.0672 or 93.70 U.S. cents
* Bond prices lower across the maturity curve
By Leah Schnurr
TORONTO, July 9 The Canadian dollar strengthened
modestly against the greenback on Wednesday, though the currency
was expected to hew to a narrow rage with investors turning
their attention to the domestic employment report at the end of
Reaction to Wednesday's Canadian housing data was muted
after a report showed housing starts unexpectedly rose in June.
Later in the day, markets will get the minutes
from the U.S. Federal Reserve's most recent policy meeting.
But the loonie is expected to be constrained until Friday's
employment report and, beyond that, next week's Bank of Canada
meeting. The economy is forecast to have added 20,000 jobs last
Investors are waiting to see how the Bank of Canada will
react to recent surprisingly strong inflation data after the
central bank has repeatedly flagged its concerns about the low
"Employment on Friday is going to be just a preamble for the
Bank of Canada next week," said Martin Schwerdtfeger, FX
strategist at TD Securities in Toronto.
"For the Bank of Canada, we think they are going to balance
once again inflation coming higher relative to their previous
projections with GDP coming lower."
Analysts expect that will allow the central bank to maintain
the neutral tone it has held since October.
"They have no incentive whatsoever to modify market
expectations at this point in time," said Schwerdtfeger.
The Canadian dollar was at C$1.0672 to the
greenback, or 93.70 U.S. cents, slightly stronger than Tuesday's
close of C$1.0677, or 93.66 U.S. cents.
Canadian government bond prices were lower across the
maturity curve, with the two-year off 1 Canadian cent
to yield 1.121 percent and the benchmark 10-year
down 3 Canadian cents to yield 2.256 percent.
(Editing by Nick Zieminski)