CANADA FX DEBT-C$ sinks vs US$ but gains vs other currencies on jobs data

Fri Nov 6, 2015 9:29am EST
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* Canadian dollar at C$1.3290, or 75.24 U.S. cents
    * Bond prices lower across the maturity curve

    By Alastair Sharp
    TORONTO, Nov 6 (Reuters) - The Canadian dollar hit its
weakest level against the U.S. dollar since Oct. 1 after robust
U.S. jobs data eclipsed a sharp gain in Canadian employment
helped by election-related hiring. 
    Canada added 44,000 jobs in October, its biggest gain in
five months, while U.S. nonfarm payrolls increased 271,000, its
largest rise since last December. 
    Both numbers were well above economists' estimates, but the
U.S. data had much more impact since it raised expectations of a
December interest rate hike by the U.S. Federal Reserve.
     "(The Canadian dollar) is responding more to the U.S.
employment report, where that employment gain was stronger than
expected as well," said Paul Ferley, assistant chief economist
at Royal Bank of Canada.  
    The Canadian dollar touched C$1.3290 to the
greenback, or 75.24 U.S. cents, soon after the data was released
and held there 40 minutes later. That was much weaker than
Thursday's close of C$1.3168, or 75.94 U.S. cents.
    But the loonie, as Canada's currency is colloquially known,
was stronger against all its other main currency peers.
    "The Canadian dollar, reflecting the large positive surprise
on domestic payrolls, has outperformed against pretty much every
G10 currency except the U.S. dollar today," said Andrew Kelvin,
senior rates strategist at TD Securities.
    Canadian government bond prices were lower across the
maturity curve, with the two-year down 8.5 Canadian
cents to yield 0.674 percent and the benchmark 10-year
 fell 70 Canadian cents to yield 1.726 percent.
    The spread between yields on Canadian and U.S. two-year
bonds widened to -24.4 basis points, while the 10-year spread
stretched to -59.4 basis points.

 (Reporting by Alastair Sharp Editing by W Simon)