CANADA FX DEBT-C$ touches 2-1/2 month high on risk rally despite soft jobs data

Fri Oct 9, 2015 4:57pm EDT
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(Adds strategist comment, closing figures, background)

* Canadian dollar at C$1.2937, or 77.30 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.

"On the surface, it seemed like we beat estimates. ... A lot of full time jobs were lost, and part time jobs gained. So essentially not really strong," said Hosen Marjaee, senior managing director of Canadian fixed income at Manulife Asset Management, noting that the loonie eventually recouped some of the lost ground.

The Canadian dollar ended the session at C$1.2937 to the greenback, or 77.30 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, which has gained some 1.6 percent on the week, traded as strong as C$1.2901, a level not seen in nearly 2-1/2 months. It has advanced in seven of the last eight sessions, after slumping to C$1.3457, its weakest level in 11 years.   Continued...