Canadian dollar surges on jobs data, bonds fall

Fri Dec 7, 2007 5:25pm EST
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By Cameron French

TORONTO (Reuters) - The Canadian dollar charged higher on Friday as a strong domestic jobs report showed the economy hanging in despite turmoil in the U.S. housing sector and financial market disruption.

Domestic bond prices fell after the data, even as economists continued to call for further easing from the Bank of Canada.

The currency finished at 99.49 U.S. cents, valuing each U.S. dollar at C$1.0051, up from 98.49 U.S. cents, valuing a U.S. dollar at C$1.0153, at Thursday's close.

Statistics Canada said the economy added 42,600 jobs in November, or more than quadruple what as expected, while the jobless rate ticked up to 5.9 percent.

"We had the big selloff in (the U.S. dollar versus Canada) right after the employment numbers," said George Davis, chief technical strategist at RBC Capital Markets.

The report drove the Canadian dollar as high as 99.94 U.S. cents, but it then retreated.

A $2 per barrel drop in oil prices weighed on the currency, while the U.S. dollar initially fell, then climbed after U.S. payrolls data came in slightly above forecasts.

The Canadian jobs strength follows robust third-quarter economic growth, but also comes as the Bank of Canada's view of the fallout from the U.S. subprime mortgage crisis has soured.   Continued...