March 9, 2012 / 9:39 PM / 6 years ago

CANADA FX DEBT-C$ firms as U.S. jobs data trumps Canada's

* C$ ends at C$0.9909 vs US$, or $1.0092

* Bond prices little changed across curve

* Strong U.S. jobs data outweighs weak Canada data

By Claire Sibonney

TORONTO, March 9 (Reuters) - The Canadian dollar advanced against the safe-haven greenback on Friday as the market downplayed weak domestic employment numbers in favor of stronger-than-expected U.S. jobs data that provided a further signal of recovery in Canada’s biggest trading partner.

Figures on Friday showed U.S. employers added 227,000 jobs last month, outpacing estimates of 210,000 new jobs. It was the first time in a year that payrolls have grown by more than 200,000 for three straight months.

In Canada, the economy unexpectedly failed to create any new jobs in February, continuing a trend of stalled employment despite signs of a healthy domestic economy and a comeback by the U.S. job market. The net job loss in February was 2,800 with the biggest drops in the retail and wholesale trade sectors.

“The Canadian dollar was responding to the generally better news out of the U.S. and the healthy indications on North American growth and didn’t respond much to Canada’s own employment report,” said Avery Shenfeld, chief economist at CIBC.

“The U.S. dollar now seems to be benefiting from better U.S. news and the Canadian dollar is rising on the U.S. dollar on the same events.”

The Canadian dollar was a top performer among major currencies on Friday, rising as high as C$0.9872 versus the U.S. dollar, or $1.0130, its strongest level in more than a week, following the release of the U.S. employment number. Earlier in the session, it hit a low of C$0.9942 after the release of the Canadian data.

“We’re in a state now where the Canadian dollar is more severely affected - and positively affected in this case - by U.S. data than it is by our own,” said Firas Askari, head of foreign exchange trading at BMO Capital Markets.

Twenty-four hours earlier, Canada’s central bank expressed optimism about the Canadian economy, but held its key lending rate unchanged at an ultra-low 1 percent for an 18th month.

The Canadian dollar ended the North American session at C$0.9909 versus the U.S. dollar, or $1.0092, up from Thursday’s North American close of C$0.9911 to the U.S. dollar, or $1.0090. It ended the week 0.2 percent softer.

David Bradley, director of foreign exchange trading at Scotia Capital, said he expected the Canadian currency to stay within a range of C$0.9850 to C$1.0050 against the U.S. dollar for the balance of the month.

Adding to a bullish mood in markets early in the day was the strong acceptance from Greece’s private creditors of a bond swap that will allow the country to avoid a messy immediate debt default, an issue that has kept investors skittish.

Canadian bond prices were little changed across the curve, but mostly outperformed U.S. Treasuries. The two-year bond was flat to yield 1.173 percent, while the 10-year bond rose 3 Canadian cents to yield 2.008 percent.

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