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

Fri Feb 6, 2009 11:28am EST
 
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* C$ trims losses after U.S. jobs data released

* Bonds rise as March BoC rate cut seen after poor data

* Canada Jan employment -129K, worst job loss on record

* Unemployment rate rises to 7.2 pct from 6.6 pct in Dec (Updates to late morning, adds quote)

By Ka Yan Ng

TORONTO, Feb 6 (Reuters) - Canada's dollar trimmed losses versus the U.S. currency on Friday as hopes for further U.S. government stimulus overtook fallout from weaker-than-expected domestic jobs figures.

The Canadian dollar tumbled to a two-week low versus the greenback after a Canadian government report showed the biggest monthly job loss ever recorded. [ID:nN06253705]

But it recovered some of its losses as the worst U.S. unemployment data in decades boosted political pressure for a economic stimulus deal to be passed, lifting U.S. stocks and triggering a price fall in U.S. government debt.

"The Canadian dollar is coming back on external factors. Risk is back on the table," said Jack Spitz, managing director of foreign exchange at National Bank of Canada, who noted stock markets rallied following the U.S. jobs data.   Continued...