CANADA FX DEBT-Jobs data weighs on C$, bonds gain

Fri Dec 5, 2008 10:38am EST
 
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* Canadian dollar sinks on disappointing jobs data

* Canada Nov loses 70,600 jobs, most in 26 years

* Bonds gain on safe-haven appeal

TORONTO, Dec 5 (Reuters) - The Canadian dollar sank versus the U.S. dollar on Friday as employers in Canada cut more jobs than expected last month, reflecting an economy that is inching closer to recession.

Bond prices gained as worries about recession and the potential for more rate cuts renewed the safe-haven appeal of government debt.

At 10 a.m. (1500 GMT), the currency was at C$1.2952 to the U.S. dollar, or 77.21 U.S. cents. That is down from C$1.2781 to the U.S. dollar, or 78.24 U.S. cents, at Thursday's close. The currency dropped 2 percent on Thursday, its seventh straight day of losses, on the back of a sharp fall in oil prices and political uncertainty in Canada.

Canada's economy shed 70,600 jobs in November -- more than any other month since June 1982 and nearly triple the forecast figure -- as the economic downturn forced layoffs in the Ontario manufacturing sector, Statistics Canada said. The unemployment rate ticked higher to 6.3 percent from 6.2 percent in October. [ID:nN05440350]

The U.S. economy shed a shocking 533,000 jobs in November for the weakest performance in 34 years, data showed. [ID:nN04409522]

"The release of disastrous payroll data in both the U.S. and Canada is having a clear influence in currency flows this morning," said Jack Spitz, managing director of foreign exchange at National Bank Financial.   Continued...