* C$ touches near 21-month high at C$0.9977 to US$
* Retreats to end lower at C$1.0051 to US$
* Building permits data soft; PMI jumps
* Bonds higher as risk appetite dries up
(Updates to close, adds jobs data details, quote)
By Jennifer Kwan
TORONTO, April 7 (Reuters) - The Canadian dollar pushed
through parity against the greenback for a second day on
Wednesday, nearing a 21-month high, but then fell back sharply
as oil prices fell and risk appetite dried up.
The Canadian dollar <CAD=D3> touched a low of C$1.0058 to
the U.S. dollar, or 99.42 U.S. cents, its descent deepening as
oil prices retreated after six sessions of gains and as euro
zone worries persisted. [O/R] [MKTS/GLOB]
Canadian building permits data for February came in weaker
than the market had forecast, also pressuring the currency.
Building permits, a barometer of future construction activity,
slid 0.5 percent in the month to C$5.7 billion versus market
expectations of a 2 percent gain.
However, the Ivey purchasing activity index for March
jumped more than expected. [ID:nN07109411]
Early in the day the currency drove as high as C$0.9977, or
US$1.0023, its highest intraday level since July 15, 2008.
"Overnight, the Canadian dollar thrust its way through
parity a few times but ultimately it's softened up and is just
below the threshold for now," said Eric Lascelles, chief
economics and rates strategist at TD Securities.
"It seems to be a day more broadly in which risk has been
taken off the table around the world."
The Canadian dollar <CAD=D3> finished at C$1.0051 to the
U.S. dollar, or 99.49 U.S. cents, down from Tuesday's close of
C$1.0012 to the U.S. dollar, or 99.88 U.S. cents.
"We continue to hug parity but there is no conviction at
this point in time to really take it (dollar/Canada) much
lower," said Matthew Strauss, senior currency strategist at RBC
Stock markets around the world fell on Wednesday as worries
about Greece's fiscal woes brewed and investors paused after a
recent runup in prices. [MKTS/GLOB] [.N] [.TO]
The next major Canadian economic report will be employment
data for March, due for release on Friday. The median forecast
of 19 analysts is for a net gain of 25,000 jobs, slightly more
than the 20,900 jobs added in February. None of the analysts
expected job losses, with forecasts for creation ranging from
5,000 to 45,000. [ID:nN07111989]
BOND PRICES CLIMB
Canadian bond prices were higher across the curve in tandem
with the U.S. Treasury market in a flight to safety move.
Prices also got a boost after strong auctions on both sides of
U.S. Treasuries gained after record-setting demand for a
$21 billion auction of 10-year notes, which eased concerns over
weakening demand for government securities. [US/]
The government of Canada's C$3 billion auction of two-year
bonds met with better than expected demand for a non-benchmark
The two-year government bond <CA2YT=RR> was up 12 Canadian
cents at C$99.47 to yield 1.7888 percent, while the 30-year
bond <CA30YT=RR> gained 68 Canadian cents to C$115.08 to yield
Canadian government bonds mostly underperformed U.S.
issues, with the Canadian 30-year yield 67.5 basis points below
its U.S. counterpart, compared with around 72 basis points the
(Additional reporting by Ka Yan Ng and Claire Sibonney;
editing by Peter Galloway