TORONTO: The Canadian dollar was mildly firmer against its US counterpart on Thursday, even as the US dollar held near a six-week high against other key currencies.
Investors, taking a wait-and-see stance, focused on North American jobs data due on Friday.
Should US nonfarm payrolls show a sustained recovery in the job market, it will likely be viewed as enough for the Federal Reserve to begin trimming its bond-buying program when it meets in mid-September.
In Canada, economists are expecting 20,000 new jobs were created in August, following a sharp drop of 39,400 in July.
"We see some substantial moves in other currencies compared to the big dollar ... And yet Canada has been pretty much anchored to current levels. I think that's a reflection of North American payrolls tomorrow and folks choosing to err on the side of caution," said Brad Schruder, director of foreign exchange at BMO Capital Markets.
Schruder noted the recent string of disappointing Canadian data, but said there were factors that could result in a positive surprise for Canadian employment data.
"Folks don't really want to stick their necks out either way. I wouldn't be surprised if later on today you saw USD/CAD try to push lower, i.e. see the Canadian dollar appreciate as the market tries to shake out some weaker positions," he said.
The Canadian dollar was trading at C$1.0484 versus the US dollar, or 95.38 US cents around 9:35 a.m. EDT (1335 GMT). This was marginally stronger than Wednesday's finish at C$1.0492, or 95.31 US cents.
The Canadian dollar, which was outperforming all of its major counterparts except for the Brazilian currency, could strengthen by as much as 1 cent over the next two sessions, despite the US dollar strength, Schruder said.
Prices for Canadian government debt were mostly lower, with the two-year bond off 3.5 Canadian cents to yield 1.256 percent and the benchmark 10-year bond off 31 Canadian cents to yield 2.757 percent.
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