Canadian dollar climbs to one-month high ahead of domestic jobs data
Canadian dollar gains against the greenback
Touches its strongest level since June 3
Canada's services economy deteriorates in June
Canadian bond yields rise across the curve
By Fergal Smith
TORONTO, July 4 (Reuters) -The Canadian dollar strengthened to a one-month high against its U.S. counterpart on Thursday as the greenback posted broad-based declines, ahead of domestic jobs data that could guide bets on further interest-rate cuts by the Bank of Canada.
The loonie CAD=D3 was trading 0.2% higher at 1.3609 to the U.S. dollar, or 73.48 U.S. cents, its strongest level since June 3, despite soft business activity data.
Canada's services economy moved back into contraction in June as a decline in new business weighed on the sector's performance even as inflation pressures cooled, S&P Global Canada services PMI data showed.
"Although today's PMI numbers should add further confirmation that the Canadian economy remains weak, it is tomorrow's jobs report that is key for the Bank of Canada," strategists at Monex Europe said in a note.
Economists expect the Canadian employment report, due on Friday, to show the economy adding 22,500 jobs in June and the unemployment rate rising to 6.3% from 6.2% in May.
Investors see a roughly 40% chance the Bank of Canada will cut rates at its next policy meeting on July 24. Last month, the BoC became the first G7 central bank to ease policy, lowering its benchmark rate by 25 basis points to 4.75%.
The U.S. dollar .DXY lost ground against a basket of major currencies after recent weak U.S. economic data raised prospects the Federal Reserve would cut interest rates as soon as September. U.S. markets were closed for the Independence Day holiday.
The North American price of oil CLc1, one of Canada's major exports, was nearly unchanged at $83.91 a barrel, holding near its highest level in more than one month.
Canadian bond yields rose across the curve. The 10-year was up 3.9 basis points at 3.605%, moving closer to the one-month high it touched on Tuesday at 3.659%.
Reporting by Fergal Smith; Editing by Rod Nickel
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