Loonie hits 2-week high ahead of jobs data

Thu Apr 3, 2008 4:55pm EDT
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By Frank Pingue

TORONTO (Reuters) - The loonie rose nearly 1 percent against the U.S. dollar on Thursday, thanks to a combination of lofty commodity prices and expectations for a solid domestic jobs report to cap off the week.

Domestic bond prices, with no Canadian data to consider, ended mixed, given a pair of contrasting U.S. data reports.

The Canadian dollar closed at C$1.0044 to the U.S. dollar, or 99.56 U.S. cents, up from C$1.0136 to the U.S. dollar, or 98.66 U.S. cents, at Wednesday's close.

A big chunk of the currency's gain came late in the session when it rallied to C$1.0028 to the U.S. dollar, or 99.72 U.S. cents. That was its highest level two weeks and paved the way for its biggest percent gain in a session since late February.

Backing the gain was a rise in gold prices above $900 an ounce, and oil prices that stuck close to recent high levels, despite a drop on Thursday.

Comments from Federal Reserve Chairman Ben Bernanke, who seemed less pessimistic than anticipated about the U'S. economy, also offered the Canadian currency some support as Canada relies heavily on its exports to the United States.

"It partly reflects the better bid in commodity prices and a sense that perhaps the worst is over for the U.S. economy," said Sal Guatieri, senior economist at BMO Capital Markets.

"We've seen a consistent pattern of Canadian job numbers outperforming U.S. figures so maybe the market is getting ahead of that and pricing a repeat tomorrow morning."   Continued...