CANADA FX DEBT-C$ firms back above par after U.S. ADP report

Wed Jan 5, 2011 9:21am EST
 
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 * C$ rises to $1.0046 U.S. cents
 * U.S. ADP report shows better-than-expected job gains
 * Bonds prices fall across curve
 (Recasts after ADP jobs data)
 By Claire Sibonney
 TORONTO, Jan 5 (Reuters) - The Canadian dollar climbed back
above parity against the greenback on Wednesday after the U.S.
ADP national employment report showed a much better than
expected gain in private sector jobs for December.
 Following the data, the currency CAD=D4 touched a session
high of C$0.9954 to the U.S. dollar, or $1.0046, up from about
C$1.0011, or 99.89 U.S. cents just before the release.
 The Canadian dollar had been lagging for a second straight
day on the back of dissipating risk appetite in commodity and
equity markets.
 "We're in a scenario now where any fundamental U.S. number
that is positive is actually perceived to be more positive for
Canada," said Firas Askari, head of foreign exchange trading at
BMO Capital Markets, noting that the Canadian dollar was
outperforming against other major currencies.
 U.S. private employers added 297,000 jobs in December,
according to the ADP Employer Services report, nearly triple
forecasts. [ID:nN05266445]
 "The perception is that the headwinds in the Canadian
economy are not really domestic but primarily U.S.," Askari
said.
 "This is potentially a beginning of a trend of a pickup in
employment growth, which leads to housing and everything else,
which leads to us exporting  more of our great commodities.
That's the logic."
 At 9:04 a.m. (1404 GMT), the Canadian dollar CAD=D4 stood
at C$0.9957 to the U.S. dollar, or $1.0043 U.S. cents, up from
Tuesday's finish at C$0.9985 to the U.S. dollar, or $1.0015.
 Askari said the next support level for the U.S. dollar is
the Monday low of C$0.9889.
 Official monthly employment reports on Friday are next in
focus, with job growth expected in both the United States and
Canada. U.S. Federal Reserve Chairman Ben Bernanke's
congressional testimony on Friday will also be closely
followed. [ID:nN31145126] ECON
 Canadian government bond prices retreated after the data,
tracking U.S. Treasuries lower. The two-year bond CA2YT=RR
was down 5 Canadian cents to yield 1.747 percent, while the
10-year bond CA10YT=RR shed 75 Canadian cents to yield 3.226
percent.
  (Reporting by Jeffrey Hodgson)