* Canadian dollar at C$1.1115 or 89.97 U.S. cents
* Bond prices mostly higher across maturity curve
By Leah Schnurr
TORONTO, Feb 5 The Canadian dollar weakened
against the greenback on Wednesday as the market sought
direction after a recent correction and as investors trained
their focus on employment reports on both sides of the border at
the end of the week.
Disappointing economic data added to the softer tone as the
value of Canadian building permits fell unexpectedly in
December, with residential permits sinking for a second straight
After hitting a 4-1/2 year low last week, the loonie has
managed to regain some ground in recent days, rising for the
past four sessions.
"I still think the general tone is probably corrective for
the Canadian dollar, we saw a pretty significant turnaround of
the liquidation trade late last week," said Shaun Osborne, chief
currency strategist at TD Securities in Toronto.
Still, analysts say the factors that have pressured the
loonie over the past few months - including a more dovish stance
from the Bank of Canada - have not gone away and are likely to
continue to weigh on the currency.
"I think this is a pause in the trend. You've got to
remember we've come from C$1.02 in September up to C$1.12
without any real correction at all," Osborne said.
"So I wouldn't be at all surprised to see a bit of a
shake-out just from a short-term point of view, but we still
think that you've got to be looking to get long U.S.
The Canadian dollar was at C$1.1115 to the
greenback, or 89.97 U.S. cents, weaker than Tuesday's close of
C$1.1081, or 90.24 U.S. cents.
Investors were looking ahead to Friday's Canadian employment
report, which is expected to show hiring picked up in January
after the economy unexpectedly shed jobs at the end of last
At the same time, data in the United States is expected to
show the economy added 185,000 jobs last month after
disappointing job growth in December. Data earlier on Wednesday
showed U.S. private employers added 175,000 jobs last month, shy
of economists' expectations for 180,000.
Canadian government bond prices were mostly higher across
the maturity curve, with the two-year up 0.7 Canadian
cent to yield 0.958 percent and the benchmark 10-year
up 9 Canadian cents to yield 2.339 percent.