CANADA FX DEBT-C$ posts a 6-week high, supported by jobs gain
* Canadian dollar at C$1.3279, or 75.31 U.S. cents * Loonie touches its strongest since Oct. 21 at C$1.3254 * Bond prices higher across the yield curve By Fergal Smith TORONTO, Dec 2 (Reuters) - The Canadian dollar strengthened to a six-week high against its U.S. counterpart on Friday as domestic jobs increased for the fourth straight month, supporting the view that the Bank of Canada will remain on hold at next week's announcement. The Canadian economy added 10,700 jobs in November and the jobless rate fell to a five-month low of 6.8 percent, with part-time work accounting for the gains for the second month in a row, Statistics Canada said. Analysts polled by Reuters had predicted a loss of 20,000 jobs and said the jobless rate would stay at 7.0 percent. "I think the labor market has moved in the right direction in the last couple of job reports, so I don't see strong reason for the Bank of Canada to ease ... especially after this week's OPEC decision," said William Adams, senior international economist at PNC Financial Services Group. The Organization of the Petroleum Exporting Countries reached an agreement on Wednesday to cut output, triggering a rally in crude oil, one of Canada's major exports. Oil held on to this week's sharp gains. U.S. crude prices were up 0.45 percent at $51.29 a barrel. At 9:30 a.m. EST (1430 GMT), the Canadian dollar was trading at C$1.3279 to the greenback, or 75.31 U.S. cents, stronger than Thursday's close of C$1.3317, or 75.09 U.S. cents. The currency's weakest level of the session was C$1.3319, while it touched its strongest since Oct. 21 at C$1.3254. The U.S. dollar dipped against a basket of currencies despite data showing a solid rise in U.S. jobs that made it almost certain that the Federal Reserve will raise interest rates later this month, with investors taking a cautious stance before Italy's referendum on constitutional reform on Sunday. The implied probability of a Bank of Canada interest rate hike by mid-2017 was nearly 30 percent, overnight index swaps data showed, little changed from before the jobs data. Just one month ago there was a 30 percent probability of a rate cut. Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 0.5 of a Canadian cent to yield 0.754 percent and the benchmark 10-year climbed 18 Canadian cents to yield 1.653 percent. On Thursday, the 10-year yield touched its highest in more than one year at 1.712 percent as the rally in oil prices raised inflation expectations. (Reporting by Fergal Smith; Editing by Chizu Nomiyama)
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