CANADA FX DEBT-C$ slips as U.S. jobs figures robust, Canada's weak

Fri Dec 5, 2014 10:03am EST
 
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* Canadian dollar at C$1.1412 or 87.63 U.S. cents
    * Bond prices mixed across the maturity curve

    By Solarina Ho
    TORONTO, Dec 5 (Reuters) - The Canadian dollar dropped
further against the greenback on Friday after U.S. employment
data for November came in stronger than expected and Canadian
job figures were weaker than foreseen.
    The U.S. wage growth and labor market strength offered more
signals that the U.S. Federal Reserve might be getting closer to
raising interest rates. In Canada, however, the jobs data
affirmed expectations that the Bank of Canada will stay on hold
on rates until sometime after the Fed announces its first hike.
   "The U.S. employment report will provide a lift to the U.S.
dollar and I think the Canada could come under a little bit of
downward pressure as a result as well," said Paul Ferley,
assistant chief economist at Royal Bank of Canada.
    At 9:31 a.m. (1411 GMT), the Canadian dollar was at
C$1.1412 to the greenback, or 87.63 U.S. cents, weaker than
Thursday's close of C$1.1375, or 87.91 U.S. cents. It briefly
dropped as low as C$1.1443, or 87.39 U.S. cents.
    Canada lost 10,700 jobs in November after two consecutive
months of big gains. Analysts had expected an increase of 5,000
jobs following increases of 43,100 and 74,100 jobs in October
and September respectively. The unemployment rate edged up to
6.6 percent from October's 6.5 percent as had been expected.
    Market focus, however, was on the U.S. data, which showed
that wages increased and that employers added 321,000 new jobs
last month, the largest gain in nearly three years and the 10th
straight month that growth has exceeded 200,000. Economists had
forecast an increase of 230,000. 
    "The two-year yields (in Canada) spiked higher on the U.S.
data, despite the weaker Canadian data, so I think this is all a
U.S. story," said Derek Holt, vice president of economics at
Scotiabank.
    Canadian government bond prices were mixed across the
maturity curve, with the two-year off 5 Canadian
cents to yield 1.039 percent, and the benchmark 10-year
 sliding 34 Canadian cents to yield 1.947 percent.

 (Additional reporting by Allison Martell; Editing by Peter
Galloway)