CANADA FX DEBT-C$ rises as U.S. data spurs stimulus hopes

Fri Feb 6, 2009 4:40pm EST
 
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* C$ reverses losses, catches up with riskier currencies

* Risk appetite returning on stimulus hopes

* Canada job loss 129K in January, worst month on record (Updates to close)

By Ka Yan Ng

TORONTO, Feb 6 (Reuters) - Canada's dollar reversed course to finish higher versus the U.S. currency on Friday as risk appetite returned to the market, overcoming the fallout from Canadian jobless numbers that were the worst on record.

The Canadian currency finished at C$1.2225 to the U.S. dollar, or 81.79 U.S. cents, up 0.7 percent from C$1.2310 to the U.S. dollar, or 81.23 U.S. cents, at Thursday's close.

Earlier in the day, the currency slumped to a two-week low of C$1.2540, or 79.74 U.S. cents, after Statistics Canada said the country suffered its worst job losses in more than three decades in January.

But there was no momentum behind the currency's move beyond C$1.25, analysts said, partly because risk appetite was making a comeback, lifting stocks, as the worst U.S. unemployment data in decades boosted political pressure for a economic stimulus deal to be passed.

"If we can't make a new low for the Canadian dollar on the back of the worst employment numbers in history, it suggests to me that the Canadian dollar isn't going to fall that much more at the moment," said Shaun Osborne, chief currency strategist at TD Securities.   Continued...