CANADA FX DEBT-C$ firms ahead of key U.S. jobs data

Fri Apr 1, 2011 8:20am EDT
 
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   * C$ firms to C$0.9679, or $1.0332
 * Bonds mostly lower as investors shed safe-haven assets
 * U.S. March non-farm payrolls expected to be strong
 By Solarina Ho
 TORONTO, April 1 (Reuters) - The Canadian dollar hit a
three-week high against the greenback on Friday as oil boosted
the commodity-linked Canadian currency before key U.S. economic
data.
 A strong reading was anticipated for the March non-farm
payrolls, due at 8:30 a.m. (1230 GMT), with analysts
forecasting that the U.S. economy added 190,000 jobs last
month. The data is key in terms of shedding light on the U.S.
economic recovery and comes a day after hawkish U.S. Federal
Reserve comments. [FRX/]
 "The immediate reaction if you get a stronger-than-expected
employment report is it will buoy the U.S. dollar relative to
most other currencies," said Paul Ferley, assistant chief
economist at Royal Bank of Canada.
 "However, I think recognition will be given to the fact
that a stronger U.S. probably provides a bit more of a lift to
commodity prices, so I think any weakness in Canada will be
more muted to what we might see relative to euro and yen."
 At 7:57 a.m. (1157 GMT), the currency CAD=D4 stood at
C$0.9679 to the U.S. dollar, or $1.0332, up from Thursday's
North American finish of C$0.9696, or $1.0314. It had hit a
session high of C$0.9670 early in the morning.
 This was the strongest showing for the Canadian dollar
since March 9, when the currency hit C$0.9667, or $1.0344, the
strongest level since November 2007.
 Oil, a key Canadian export, rose ahead of the U.S. data on
upbeat expectations. Brent crude was close to $118 a barrel,
near its highest level in nearly four weeks, and U.S. crude
rose to over $107 a barrel, also near multiyear highs. Fighting
in Libya, an OPEC producer, helped underpin the strength.
[O/R]
 Canadian bond prices were mostly weaker across the curve,
tracking U.S. Treasuries. Investors shed safe-haven assets for
stocks and other riskier bets in anticipation of the strong
jobs data. [US/]
 The two-year bond CA2YT=RR was down 8 Canadian cents to
yield 1.872 percent, while the 10-year bond CA10YT=RR lost 12
Canadian cents to yield 3.368 percent.
 (Reporting by Solarina Ho; Editing by Kenneth Barry)