CANADA FX DEBT-C$ rises, bonds slip after U.S. payrolls

Fri Mar 6, 2009 10:14am EST
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* Canadian dollar extends gains

* Bonds fall, take cue from rallying equities

* U.S. loses 651,000 jobs, in line with forecast (Adds details)

TORONTO, March 6 (Reuters) - The Canadian dollar climbed versus the U.S. dollar on Friday morning after U.S. data showed a massive job loss in February but one that wasn't as bad as some in the market had feared.

The U.S. economy shed 651,000 jobs in February, pushing the unemployment rate to its highest level in 25 years as companies buckled under the strain of recession. [ID:nN05339652].

The figure was near the consensus expectation of a 648,000 drop in nonfarm payrolls of economists polled by Reuters, but some had forecast losses as high as 800,000.

The Canadian dollar was in a basket of currencies rising against the greenback on Friday. The U.S. dollar has lately been favored as a safe haven in the face of global economic woes.

At 9:50 a.m. (1450 GMT), the Canadian dollar rose to C$1.2792 to the U.S. dollar, or 78.17 U.S. cents, up from Thursday's close at C$1.2884 or 77.62 U.S. cents.

"The initial knee-jerk reaction was to drive the Canadian dollar stronger as the first read on the U.S. employment report was that it wasn't quite as bad as the worst expectations," said Doug Porter, deputy chief economist, BMO Capital Markets.   Continued...