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Canadian dollar ends flat, awaiting jobs data

TORONTO: The Canadian dollar traded in a tight range throughout the day on Thursday as traders played a wait-and-see game ahead of Friday morning's key Canadian unemployment data.

The Canadian dollar closed at C$1.4570 (68.63 US cents) versus C$1.4567 at the close on Wednesday.

And traders said this tight range was expected to continue until the Canadian government releases the jobs data for February early tomorrow morning.

"It's really trading in no-man's land right now," said Jack Spitz, regional manager, foreign exchange at National Bank Financial in Toronto.

"It's going to be here until 7 o'clock (a.m. 1200 GMT Friday) at which point, I think we'll see Canada rally."

Dollar traders also kept a close eye on comments by Bank of Canada Governor Gordon Thiessen, in New York on Thursday to address the Canadian Society of New York about "The conduct of monetary policy when you live next to a large neighbour."

During his speech, Thiessen said the central bank remains vigilant for signs of rising inflation as Canada's economy, spurred by robust US demand, continues to surge early in 2000.

"The latest data indicate that the external demand for Canadian output, especially from the United States, is stronger than previously expected. Under these conditions, it is essential for the central bank to be vigilant," Thiessen said.

While he dealt mainly with Canada's flexible exchange rate regime and independent monetary policy, Thiessen said the central bank has been concerned about Canada's economy picking up too much speed.

"There is a risk that we could hit the capacity ceiling too hard, causing supply bottlenecks and shortages that could lead to an ongoing increase in inflation," Thiessen said. "To reduce this risk, the Bank of Canada increased its Bank Rate twice, in November and February, following similar rate hikes by the US Federal Reserve."

Though Thiessen's comments had little effect on the currency, Spitz said he found them encouraging .

"It was dollar-supportive. I liked his comments. He certainly is leading me to believe that he's on track to match a quarter-point (US Federal Reserve) rate increase at the end of the month," said Spitz.

"His comments are as dollar supportive as I've seen and it will be interesting how it plays out near the end of the month."

In cross-trading against major currencies, the Canadian dollar was at 73.12 yen and at C$1.4070 against the euro. -Reuters