CANADA FX DEBT-C$ pierces US$ parity on data, stimulus hope
* C$ climbs to high of $1.0003, strongest since May * Hope for U.S., European stimulus keeps C$ at lofty levels * Trades near recent record high against euro * Bond prices lower across curve By Jennifer Kwan TORONTO, Aug 3 (Reuters) - Canada's dollar traded at a stronger level than the U.S. currency on Friday for the first time in more than 2 months as U.S. jobs data offered signs of strength while still fueling investors hopes of central bank action to boost the economy. The currency climbed to a high of C$0.9997 to the greenback, or $1.0003, its strongest level since May 15, after the U.S. data. Nonfarm payrolls rose 163,000 last month, beating economists expectations for a 100,000 gain. The report was dimmed somewhat, however, by the increase in the jobless rate to 8.3 percent from 8.2 percent in June, even as more people gave up the search for work. The stronger-than-extended jobs growth suggested the economy of Canada's largest trading partner continues to expand. But some think the higher jobless rate could still pressure the U.S. Federal Reserve to try to boost the economy with a third round of bond purchases. "That's got investors thinking we'll see the Fed stepping in later in the year to provide stimulus, so that's increasing risk appetite and weakening the U.S. dollar across the board," said Darren Richardson, a senior corporate dealer at CanadianForex. The Fed this week stopped short of offering new monetary stimulus even as it signaled further bond buys could be in store. At 9:20 a.m. (1320 GMT), the Canadian dollar was at C$1.0006, or 99.94 U.S. cents, higher than Thursday's North American finish at C$1.0072, or 99.29 U.S. cents. The Canadian dollar traded near record high levels of C$1.2189 against the euro, or 82.04 euro cents, which it hit on Thursday. "Even though the ECB didn't really change their stance yesterday, the market is still clinging to the hope of the ECB taking action, combined with the Fed later in the year," he said. "As always, if we do see unexpected negative data coming form the peripheral economies we'll see the U.S. dollar rebound immediately as risk comes off. "It really is a day-to-day testing of risk sentiment." European shares and the euro surged and Spanish bond yields eased off their highs on Friday as investors decided the ECB was committed to tackling the region's debt crisis despite taking no action this week. The two-year bond fell 8 Canadian cents to yield 1.101 percent, and the benchmark 10-year bond dropped 54 Canadian cents to yield 1.731 percent.
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