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CANADA FX DEBT-C$ weaker as oil slips; trade, jobs data eyed

Published 2017-02-06, 05:15 p/m
© Reuters.  CANADA FX DEBT-C$ weaker as oil slips; trade, jobs data eyed
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(Adds broker comment, updates prices to close)

* Canadian dollar settles at C$1.3087, or 76.41 U.S. cents

* Bond prices higher across the maturity curve

By Alastair Sharp

TORONTO, Feb 6 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Monday as oil prices fell and bond yields settled at a two-week low, with investors awaiting December trade data due on Tuesday and jobs numbers later in the week for signs of economic growth.

The loonie, as Canada's currency is popularly known, had gained for two straight weeks on a combination of favorable economic data and greenback weakness. Last week, it touched its strongest level since September.

The Canadian dollar CAD=D4 settled at C$1.3087 to the greenback, or 76.41 U.S. cents, weaker than the Bank of Canada's official close on Friday of C$1.3028, or 76.76 U.S. cents.

The loonie traded in a range of C$1.3008 to C$1.3135.

"We spent two or three days trying to push through C$1.30 without any real success," said Darcy Browne, managing director for foreign exchange sales at CIBC Capital Markets.

"It rallied up to C$1.3135, which is the 200-day moving average, and got rejected pretty hard from there as well," he said.

Economists polled by Reuters have a wide range of expectations for Tuesday's data after Canada achieved its first trade surplus in more than two years in November. most optimistic see a C$1.5 billion surplus, while the most pessimistic expect a C$1.5 billion deficit. The median view is for a surplus of C$350 million after the surprise C$526 million surplus in the prior month.

Jobs data is due on Friday, with the market expecting no growth after a bumper 53,700 job gains in December.

U.S. crude oil CLc1 prices settled down 1.5 percent at $53.01 a barrel, while Brent LCOc1 lost 1.9 percent to $55.72. O/R

Canadian government bond prices were higher across the maturity curve, with the two-year CA2YT=RR price up 7.5 Canadian cents to yield 0.737 percent and the benchmark 10-year CA10YT=RR rising 52 Canadian cents to yield 1.701 percent, its lowest settlement since Jan. 23.

The Canada-U.S. two-year bond spread narrowed to -41.6 basis points, while the 10-year spread came in at -70.9 basis points.

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