CANADA FX DEBT-C$ rallies after surprisingly strong jobs data

Fri May 11, 2012 9:46am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* C$ firms to C$0.9981 vs US$, or $1.0019

* Canada adds 58,200 jobs in April

* Unexpectedly strong data boosts rate hike bets

* Bond yields jump after report, underperform Treasuries

By Claire Sibonney

TORONTO, May 11 (Reuters) - The Canadian dollar rallied to a session high against its U.S. counterpart on Friday, turning positive on the day and breaking through parity with the greenback, after data showed Canada added much more jobs than expected in April.

Defying market expectations, Canada added 58,200 jobs in April, mostly full-time, after a whopping gain of 82,300 new positions in March. (ID:nL1E8GBJ5M)

The data increased expectations that the Bank of Canada could resume tightening monetary policy this year. O vernight index swaps, which trade based on expectations for the central bank's key policy rate, showed that traders sharply increased bets on a rate hike in the second half.

Higher interest rates tend to strengthen a country's currency by attracting international capital flows.   Continued...