Reuters: US Dollar Report: CANADA FX DEBT-C$ softens on euro zone fears; eyes jobs data

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CANADA FX DEBT-C$ softens on euro zone fears; eyes jobs data Apr 5th 2012, 12:14 Thu Apr 5, 2012 8:14am EDT * C$ at C$0.9982 vs US$, or $1.0018 * Market awaits domestic, U.S. jobs data * Bonds higher across curve By Jennifer Kwan TORONTO, April 5 (Reuters) - Canada's dollar softened slightly against its U.S. counterpart on Thursday, weighed down by worries about the financial stability of the euro zone, while investors also awaited the release of domestic and U.S. jobs data. Moves in the currency were largely influenced by weaker European shares and the euro, which fell on Thursday with further losses expected as Spanish government bonds were under pressure as worries grew about Spain's ability to meet deficit targets and fund itself after a poorly received auction the day before. David Bradley, director of foreign exchange trading at Scotia Capital, said a key factor lifting the U.S. dollar was the lingering effect of minutes from the U.S. Federal Reserve's March meeting. The U.S. central bank's minutes, released on Tuesday, suggested the appetite for a third dose of quantitative easing, so-called QE3, has decreased as the American recovery firms. "It's the continuation after the FOMC minutes. The U.S. dollar has rallied since then," he said. "The euro is selling off, partially on that, and the fact there seems like there's some trouble brewing in Europe." At around 7:50 a.m. (1150 GMT), the Canadian dollar was at C$0.9982 versus the U.S. currency, or $1.0018, down from its Wednesday North American finish of C$0.9964 versus the U.S. currency, or $1.0036. Markets are next focusing on Canadian employment data. Hiring in Canada is expected to recover a bit in March from February but not enough to mark a turning point for the job market, which has stalled since the middle of last year. The economy is seen adding 10,000 jobs in March, while the jobless rate may tick up to 7.5 percent. As well, the U.S. Labor Department releases first-time claims for jobless benefits for the week ended March 31. Canadian government bond prices edged higher across the curve, mirroring the rise in U.S. Treasuries that rallied strongly as a flare-up of euro zone debt fears drove investors to the safety of government debt. Canada's 2-year bond was up 6 Canadian cents to yield 1.191 percent, while the 10-year bond rose 35 Canadian cents to yield 2.090 percent. Link this Share this Digg this Email Reprints

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