CANADA FX DEBT-C$ hits 2-1/2 month high on risk rally; jobs data dampen moves

Fri Oct 9, 2015 10:14am EDT
 
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* Canadian dollar at C$1.2978, or 77.05 U.S. cents

* Bond prices mixed across the maturity curve

By Solarina Ho

TORONTO, Oct 9 (Reuters) - The Canadian dollar rallied against its U.S. counterpart on Friday, at one point touching its strongest level since late July, as investors took on more risk, relieved by indications of a more dovish U.S. Federal Reserve.

The currency surged to a session high immediately after data showed the Canadian economy created 12,100 jobs last month, but quickly pared gains as market participants digested the report, which included an unexpected rise in the unemployment rate to 7.1 percent.

"I would say despite the headline, the overall snapshot is softer than most would have expected, so as a standalone report it's ever so slightly negative for the currency," said Doug Porter, chief economist, BMO Capital Markets.

"But I think there are bigger forces at play here. If oil heads higher today, that will wash away the impact of this report."

At 9:52 a.m. EDT (1352 GMT), the Canadian dollar traded at C$1.2978 to the greenback, or 77.05 U.S. cents, stronger than the Bank of Canada's official close of C$1.3017, or 76.82 U.S. cents on Thursday.

The loonie traded as strong as C$1.2901, a level not seen in nearly 2-1/2 months, while its weakest was C$1.3022.   Continued...