Canadian dollar hits over one-week high after U.S. job data

Thu Apr 25, 2013 4:55pm EDT
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By Andrea Hopkins

TORONTO (Reuters) - The Canadian dollar hit its strongest level in more than a week against its U.S. counterpart on Thursday after U.S. data showed a fall in new jobless benefit claims, briefly tempering broader fears about tepid U.S. economic growth.

The data fueled investor appetite for riskier assets including stocks and helped support the prices of some commodities. While the Canadian currency climbed in early trade, activity fell off when the data bounce faded.

"It's very, very light volumes, very light activity, there are no big drivers across most of the markets, whether bonds or currencies," said Mark Chandler, head of Canadian fixed income and currency strategy at Royal Bank of Canada.

"The U.S. dollar was a bit of an outlier, weaker across the board, and the Canadian dollar garnered some strength from that early on," he added.

The number of Americans filing new claims for unemployment benefits fell last week by a surprisingly large 16,000 to 339,000, offering reassurance the bottom is not falling out of the labor market despite signs of slower growth.

The data countered several weeks of signs that the U.S. economic activity softened in March and early April, and recent weak global economic data, including record-high jobless figures from Spain on Thursday.

The unexpected strength in the U.S. labor market helped send U.S. stock markets up and government bonds down, aided by earnings that beat lowered expectations. <MKTS/GLOB>

The Canadian dollar ended the North American session at C$1.0208 to the U.S. dollar, or 97.96 U.S. cents, up from C$1.0256, or 97.50 U.S. cents, at Wednesday's close.   Continued...

The Canadian 20 dollar bill made of polymer is displayed at the Bank of Canada in Ottawa May 2, 2012. REUTERS/Chris Wattie