3 Min Read
* C$ slips to session low, recovers to 97.86 U.S. cents
* Bond prices edge up
* Canada economy loses 9,300 jobs, first jobs loss of 2010
* Next up: U.S. nonfarm payrolls at 8:30 a.m./1230 GMT
TORONTO, Aug 6 (Reuters) - The Canadian dollar slipped to a session low against the U.S. currency on Friday, while government bonds climbed, after a Canadian employment report showed the economy posted its first job losses of the year.
Statistics Canada said the economy lost 9,300 jobs in July, while the unemployment rate unexpectedly rose to 8 percent from 7.9 percent. Analysts in a Reuters poll had predicted an increase of 15,000 jobs after a strong gain of 93,200 in June. [ID:nN06197942]
The data knocked the Canadian unit CAD=D4 as low as C$1.0246 to the U.S. dollar, or 97.60 U.S. cents, from C$1.0200 to the U.S. dollar, or 98.04 U.S. cents, just before the report.
"It is responding to the employment report, which was weaker than the market expected," said Doug Porter, deputy chief economist at BMO Capital Markets. "More broadly speaking, we've seen a little bit of caution in broader financial markets ahead of the U.S. employment report."
The overall trading tone for markets rests on the U.S. jobs report, which will go a long way in determining the pace of the economic recovery of Canada's biggest trading partner.
U.S. nonfarm payrolls, due at 8:30 a.m., are seen rising a modest 90,000, and the unemployment rate is expected to climb to 9.6 percent, from 9.5 percent in June. [ECI/US]
By 7:45 a.m. (1140 GMT), the currency had trimmed losses to C$1.0222 to the U.S. dollar, or 97.83 U.S. cents, compared with Thursday's finish at C$1.0166 to the U.S. dollar, or 98.37 U.S. cents.
Canadian bond prices were firmer across the curve after the domestic jobs data, which added to recent evidence that country's recovery from the recession is starting to cool and could keep the Bank of Canada on a path of gradual rate increases.
Analysts said the Canadian figures should also keep the Bank of Canada on track for a quarter-point rate rise on Sept. 8. But market pricing, as measured by yields on overnight index swaps, fell to roughly a 62 percent chance compared with about 68 percent before the report. BOCWATCH
The two-year bond CA2YT=RR was up 7 Canadian cents to yield 1.482 percent, while the 10-year bond CA10YT=RR gained 32 Canadian cents to yield 3.087 percent. (Reporting by Ka Yan Ng and John McCrank; Editing by Theodore d'Afflisio)