CANADA FX DEBT-C$ edges higher, bonds drop as supply awaits

Fri Mar 6, 2009 4:56pm EST
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* Canadian dollar closes at 77.73 U.S. cents

* C$ gains early after U.S. jobs data, then retreats

* Bonds drop, face slew of supply next week (Updates to close)

By Ka Yan Ng

TORONTO, March 6 (Reuters) - The Canadian dollar finished slightly higher against the U.S. currency on Friday after giving up most of the early gains made after a U.S. jobs report that was not as bad as some had feared.

The Canadian dollar CAD= finished at C$1.2865 to the U.S. dollar, or 77.73 U.S. cents, up from Thursday's close at C$1.2884 or 77.62 U.S. cents.

The currency climbed as high as C$1.2765 to the U.S. dollar, or 78.34 U.S. cents, after data showed the U.S. economy shed 651,000 jobs in February, pushing the unemployment rate to its highest level in 25 years. [ID:nN05339652].

The jobs figure was close to a drop of 648,000 in nonfarm payrolls that had been forecast by economists polled by Reuters, though some had predicted losses as high as 800,000.

The U.S. jobs data provided a promising start for equity markets, which initially headed higher in relief. But as the stocks rally fizzled, so did the climb by the Canadian dollar.   Continued...