CANADA FX-C$ loses steam as greenback rallies on U.S. jobs data

Fri Jun 5, 2015 10:06am EDT
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* Canadian dollar at C$1.2545 or 79.71 U.S. cents

* Bond prices lower across the maturity curve

By Solarina Ho

TORONTO, June 5 (Reuters) - The Canadian dollar retreated against a rallying U.S. dollar on Friday as data showing a stronger-than-expected U.S. labor market outweighed surprisingly robust Canadian employment numbers.

Canadian employers added 58,900 jobs last month, far above the 10,000 jobs economists polled by Reuters had expected, and the biggest increase in seven months.

But the Canadian jobs figures, which have been volatile month to month, were outshone by U.S. numbers that sent the U.S. dollar jumping more than 1 percent against a basket of currencies.

U.S. job growth accelerated sharply in May, rising by 280,000, the largest gain since December, while wages also picked up. The latest numbers signaled momentum in the economy, which bolstered the prospects of a U.S. Federal Reserve interest rate hike in September.

"It would be very tough for the Bank of Canada to be cutting interest rates in an environment where the Fed is seriously considering raising rates," said Doug Porter, chief economist at BMO Capital Markets. "I think the U.S. numbers just fuel the view that the Fed will indeed be raising rates later this year."