CANADA FX DEBT-C$ falls vs US$, down 2.2 pct on week as oil, China weigh

Fri Jan 8, 2016 4:39pm EST
 
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(Adds comment, details; updates prices to close)
    * Canadian dollar at C$1.4149, or 70.68 U.S. cents
    * Bond prices flat to higher across the maturity curve

    By Alastair Sharp
    TORONTO, Jan 8 (Reuters) - The Canadian dollar slipped
against a broadly stronger U.S. dollar on Friday on
lingering fears of more tumult in China and as oil prices fell
further to notch a 10 percent fall for the week.
    Investors fear that China, the second-largest economy in the
world, is growing more slowly than expected and could further
weigh on commodity prices and global economic growth.
    The Canadian currency lost 2.2 percent of its value versus
the greenback in the first week of the year, with the U.S.
currency helped on Friday by surprisingly strong jobs data.
 
    "It felt like a day to bandage up wounds from earlier in the
week and take stock of what's been going on and square away
positions ahead of the weekend," said Brad Schruder, a director
of foreign exchange sales at BMO Capital Markets.
    "Many suspect, or should I say fear, announcements coming
out of Asia," he said. "Eyes are clearly focused on risks
emanating out of China."
    The Canadian dollar settled at C$1.4149 to the
greenback, or 70.68 U.S. cents, weaker than Thursday's official
close of $1.4097, or 70.94 U.S. cents.
    The currency brushed off employment data that showed Canada
added a greater-than-expected 22,800 jobs in December, in part
making up for heavy losses in the previous month, while the
unemployment rate stayed at 7.1 percent. 
    "The story of resilient Canadian job markets generally
continues, but I think the underlying details were much softer
than the headline on this one," said Derek Holt, vice president
of economics at Scotiabank.
    Meanwhile, U.S. job growth surged in December and employment
for the prior two months was revised sharply higher, suggesting
that a recent manufacturing-led slowdown in economic growth
would be temporary.
    The loonie's strongest level of the session was C$1.4059,
while its weakest was C$1.4163. On Thursday, it hit its weakest
since July 2003 at C$1.4170.
    U.S. crude prices settled down 11 cents at $33.16 a
barrel, and Goldman Sachs said more losses were needed to force
producers to cut supplies adequately to address a glut and the
bleak demand outlook in the market. 
    Canadian government bond prices were flat to higher across
the maturity curve, with the two-year price unchanged
to yield 0.418 percent and the benchmark 10-year 
adding 23 Canadian cents to yield 1.298 percent.

 (Additional reporting by Fergal Smith; Editing by Bernadette
Baum and James Dalgleish)