Canadian dollar rises ahead of key jobs report

Wed Feb 6, 2008 5:20pm EST
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By Frank Pingue

TORONTO (Reuters) - The Canadian dollar rose against the U.S. dollar on Wednesday as upbeat domestic economic data offered support, but its move was limited ahead of the more important jobs report due on Friday.

Domestic bond prices fell across the curve and gave back a slice of the gains made during the previous session when North American equity markets tumbled as investors checked out of riskier investments.

The Canadian dollar closed at C$1.0061 to the U.S. dollar, or 99.39 U.S. cents, up slightly from up from C$1.0072 to the U.S. dollar, or 99.29 U.S. cents at Tuesday's close.

Early in the session the currency reached its highest level in just over a week when it hit C$1.0006 to the U.S. dollar, or 99.94 U.S. cents, after domestic data topped forecasts.

The Ivey Purchasing Managers Index, which looks at Canadian business and government spending, rose unexpectedly in January, while Canadian building permits beat estimates in December and reached a record level for all of 2007.

But the Canadian dollar was unable to pop back above the greenback and eventually gave back most of the early gains as investors were unable to dismiss the nagging concerns surrounding the U.S. economy.

"There's so much bad news priced into the U.S. economy and so many concerns over when that's going to spill into Canada rather than if," said Steve Butler, director of foreign exchange trading at Scotia Capital.

"We should be in a feel good mood today but I think we're just going to be slightly underperforming because of all the worries about what's happening in the U.S."   Continued...

<p>Newly pressed Canadian one dollar coins, also know as loonies, at the Royal Canadian Mint in Winnipeg on November 14, 2007. REUTERS/Fred Greenslade</p>