CANADA FX DEBT-C$ falls on jobs data disappointment

Fri Nov 6, 2009 1:42pm EST
 
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 * C$ falls to lowest level since Tuesday
 * Canada's loss of 43,200 jobs in October dampens market
 * Bond prices little changed
 (Recasts)
 By Frank Pingue
 TORONTO, Nov 6 (Reuters) - Canada's currency skidded to its
lowest level in three days on Friday as disappointing Canadian
and U.S. jobs figures left investors with little interest in
higher-yielding assets.
 The Canadian dollar fell to C$1.0759 to the U.S. dollar, or
92.95 U.S. cents, its lowest level since Nov. 3, moments after
data showed the U.S. unemployment rate unexpectedly jumped to
10.2 percent in October. [ID:nN06178752]
 U.S. data affects the Canadian currency as it offers
insight into the strength of the U.S. economic recovery, which
is critical to Canada because of the tight economic ties
between the two countries.
 Before the release of the U.S. employment numbers, the
Canadian dollar was already under pressure from Canadian data
released early on Friday that showed the country lost 43,200
jobs in October, more than even the gloomiest analyst had
predicted. [ID:N06253705]
 "People are just nervous overall," said David Watt, senior
currency strategist at RBC Capital Markets. "We've got a lot of
currencies that have made a lot of money over the last little
while and people might want to take some profits."
 The Canadian dollar moved off its session low and by 1:20
p.m. (1820 GMT) was at C$1.0739 to the U.S. dollar, or 93.12
U.S. cents, still down from C$1.0658 to the U.S. dollar, or
93.83 U.S. cents, at Thursday's close.
 The Canadian figures added to a growing line of reports
that suggested the economy is taking two steps forward and one
step back as it emerges from recession.
 Still, the currency's pullback was cushioned by record high
prices for gold, a key Canadian export, a stable financial
sector and a rise in North American equities on Friday.
 "It's an environment in many ways which does not look good
for the Canadian dollar," Watt said. "But at the same time the
factors that have been underpinning the Canadian economy for
the past several years look a lot better than they do for a
number of other nations."
 BOND PRICES FLAT
 Canadian bond prices were straddling the break-even level
across the curve as dealers opted against putting too much
stock in the employment data, which is widely considered to be
a lagging indicator.
 "We are still at the turning point of the economy, which
means you are going to get a lot mixed messages from the data,"
said Michael Gregory, senior economist BMO Capital Markets.
 "So I think there is a general sense that you really can't
put too much weight on one piece of information at this stage
and that's probably, maybe, muting a little bit of the reaction
to the jobs numbers today."
 The two-year bond CA2YT=RR was up 3 Canadian cents at
C$99.68 to yield 1.4086 percent, while the 10-year bond
CA10YT=RR fell 5 Canadian cents to C$101.70 to yield 3.538
percent.
 (Editing by Peter Galloway)