Canada dollar firms after jobs data; CNOOC, Nexen deal eyed

Fri Dec 7, 2012 5:19pm EST
 
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By Solarina Ho

TORONTO (Reuters) - The Canadian dollar strengthened for the fourth straight session and jumped to a one-month high against the U.S. dollar on Friday, after both the Canadian and U.S. economies added more jobs than expected in November.

The currency pared gains after a disappointing U.S. consumer sentiment report, but recovered again after the North American market closed as a Reuters source said the Canadian government has approved the acquisition of Nexen Inc by China's CNOOC Ltd.

In Canada, government data showed 59,300 net new positions were created last month, the biggest number of jobs created in eight months. The jobless rate fell to 7.2 percent - the lowest since June - from 7.4 percent, according to Statistics Canada.

In the United States, nonfarm employment increased by 146,000 jobs last month, the Labor Department said, defying expectations of a sharp pullback related to Superstorm Sandy. However, a drop in the jobless rate to a near-four year low as jobseekers gave up their search for employment suggested the labor market was still tepid.

"You can kind of nitpick the numbers a little bit this morning, being service-producing rather than goods-producing jobs in Canada, a revision down in non-farm. But overall, the headline got positive attention, so that was very beneficial," said Don Mikolich, executive director, foreign exchange sales at CIBC World Markets.

The Canadian dollar finished the session at C$0.9910 against the greenback, or $1.0091. This was stronger than Thursday's North American session finish of C$0.9911, or $1.0090.

After the Nexen/CNOOC news, the currency strengthened to C$0.9887, or $1.0114. Earlier on Friday, it had strengthened to its highest level in a month, touching C$0.9877, or $1.0125, shortly after the release of the North American data.

"It's pretty much a one direction bet today for risk assets, and in this case for the Canadian dollar," said Mazen Issa, a strategist at TD Securities.   Continued...