* Canadian dollar at C$1.0880 or 91.91 U.S. cents
* Bond prices mostly higher across the maturity curve
By Leah Schnurr
TORONTO, Jan 13 The Canadian dollar firmed
slightly against the greenback on Monday with investors
consolidating following last week's rout as a lack of domestic
economic news gave the loonie a reprieve.
The Canadian 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 report emphasized 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 sell-off may prompt markets to take
The Canadian dollar was also getting some benefit from a
weaker greenback as disappointing jobs growth in the United
States prompted investors to reassess how quickly the Federal
Reserve could wind down its stimulus program.
"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
"I think it's very likely this week we'll see a bit of
consolidation in the loonie."
The Canadian dollar was at C$1.0880 to the
greenback, or 91.91 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, said Smith.
Smith sees the U.S. dollar-Canadian dollar trading in the
C$1.0950 to C$1.0960 area on the topside, while a pullback could
take the currency pair to the C$1.0810 to C$1.0750 range.
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 mostly higher across
the maturity curve, though the two-year was unchanged
to yield 1.015 percent. The benchmark 10-year was up
15 Canadian cents to yield 2.539 percent.