* C$ at C$0.9955 vs US$, or C$1.0045
* Currency expected to strengthen on U.S. recovery -poll
By Solarina Ho
TORONTO, Feb 6 The Canadian dollar firmed
marginally against its U.S. counterpart on Wednesday, while
holding within a recent range, as investors looked to Friday's
Canadian employment figures to offer clearer direction for the
Canada's dollar has traded between C$1.0006 and C$0.9949
since Friday, with encouraging U.S. economic data keeping it
generally firmer against the U.S. dollar.
"We're stuck in a long-term range. It's going to take a
meaningful event either from a policy perspective or growth to
really shift expectations about the Canadian dollar," said
Benjamin Reitzes, senior economist and foreign exchange
strategist at BMO Capital Markets.
"Things are normalizing to some extent. Stocks can continue
to rise with earnings, but the Canadian dollar can't continue to
strengthen indefinitely," he added, noting that the currency's
correlation with equities is slowly breaking down.
A Reuters poll released on Wednesday showed economists and
foreign exchange strategists expected the Canadian dollar to
strengthen over the course of 2013, looking past the Bank of
Canada's recent dovish comments and finding support from an
improving U.S. economy.
The Canadian dollar closed Wednesday's North
American session at C$0.9955 against the U.S. dollar, or
C$1.0045, compared with Tuesday's finish of C$0.9962, or
"It's kind of a wash when you look at Canada. ... It's just
swashbuckling back and forth there," said Darcy Browne, managing
director, foreign exchange sales at CIBC World Markets.
The Canadian dollar was stronger against major currencies,
except for the Japanese yen. It touched a 1-1/2-month
high against the Australian dollar and a five-month
high against sterling.
"Aussie is looking heavy, so the commodity complex is
looking a little tired here right now," said Browne.
Canadian monthly employment data is expected to show 5,000
jobs added in January, according to a Reuters poll.
BMO's Reitzes said Friday's employment data could weaken the
Canadian dollar a little, but said expectations were already
"Unless you get a big negative, you probably won't get a big
selloff. And even then, people hopefully by now have learned to
take the report with a pretty big grain of salt," said Reitzes.
"You get the initial knee jerk, but usually a retracement
Canadian government bond prices rose across the curve, with
the two-year bond firming about 3 Canadian cents to
yield 1.156 percent, and the benchmark 10-year bond
rising 20 Canadian cents to yield 1.995 percent.