CANADA FX DEBT-C$ gains as Keystone vote eyed, jobs data stays in focus
(Adds details, fresh comment, closing figures) * Canadian dollar at C$1.1316 or 88.37 U.S. cents * Bond prices rise across the maturity curve By Solarina Ho TORONTO, Nov 12 (Reuters) - The Canadian dollar firmed moderately against the U.S. dollar on Wednesday despite softer crude oil prices, buoyed by a possible U.S. Senate vote on the Keystone XL oil pipeline and as investors continued to digest last Friday's surprisingly robust domestic jobs report.
The commodities-linked currency, hurt by a broad U.S. dollar rally over the last several months, has also been hit hard by a sharp drop in crude prices. Canada is a major oil exporter.
But news that the U.S. Senate may vote on Thursday to approve the controversial pipeline from Canada could give the loonie a lift.
"The sense is that the momentum is shifting in the Keystone debate and that it will be approved," said Adam Button, currency analyst at ForexLive in Montreal.
"Approving the Keystone pipeline would be tremendously good news for the Canadian dollar. It would immediately generate investment flows into the oil sands." The Canadian dollar finished the session at C$1.1316 to the greenback, or 88.37 U.S. cents, stronger than Tuesday's market close of C$1.1335, or 88.22 U.S. cents.
"Overall, today's Canadian dollar performance is impressive. The U.S. dollar's been broadly stronger. I think the Canadian dollar has managed to weather the storm," said Button.
The loonie, which hit a more than five-year low last week, has recouped some of those losses since the release of the positive Canadian employment report last Friday. Still, analysts expect the currency to remain around the C$1.13 level in the near term.
"You're getting a bit of consolidation. I think the markets are still digesting the solid jobs report," said Bipan Rai, director of foreign exchange strategy at CIBC World Markets, who said the Canadian dollar could strengthen to C$1.1250 in the short term.
"We fully expect the market to sell the loonie on those dips and still have that bias to buy U.S. dollar against it." Canadian government bond prices were higher across the maturity curve, with the two-year up 3.5 Canadian cents to yield 1.018 percent and the benchmark 10-year rising 1 Canadian cent to yield 2.058 percent.
(Editing by Peter Galloway and James Dalgleish)
