CANADA FX DEBT-Jobs data boosts C$ to six-month high

Fri May 8, 2009 9:52am EDT
 
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 * C$ rallies as high as 86.44 U.S. cents
 * Currency gains follow upbeat jobs data
 * Bond prices lower across the curve
 By Frank Pingue
 TORONTO, May 8 (Reuters) - The Canadian dollar raced to its
highest level in more than six months on Friday as domestic and
U.S. jobs data that came in better than expected offered a bid
to perceived riskier currencies.
 Canada's currency rallied to C$1.1569 to the U.S. dollar,
or 86.44 U.S. cents, right after the 8:30 a.m. (1230 GMT) U.S.
data showed employers there cut less jobs than was expected in
April [ID:nN07416806]. That was the domestic currency's highest
level since Nov. 5.
 The rise added to gains recorded earlier when a Canadian
jobs report showed employers unexpectedly added 35,900 jobs in
April, compared with analysts' expectations for more heavy job
losses [ID:nN08444159]
 "With the U.S. numbers being a little better than expected
the interesting thing is we've actually seen the U.S. dollar
weaken off because it's the risk aversion theme that's driving
price action right now," said George Davis, chief technical
strategist at RBC Capital Markets.
 "And with equity markets firming up a little bit on the
back of the stronger than expected employment report that has
pushed risk aversion levels lower which in turn has been
negative for the U.S. dollar."
 By 9:35 a.m., the Canadian unit had backed off slightly to
C$1.1596 to the U.S. dollar, or 86.24 U.S. cents, still up from
Thursday's close of C$1.1725 to the U.S. dollar, or 85.29 U.S.
cents.
 The Canadian dollar had started its ascent ahead of the
7:00 a.m. domestic jobs report. Analysts said there was early
chatter in the marketplace that the report could be stronger
than expected.
 BOND PRICES LOWER
 Canadian bond prices were lower across the curve as the
latest upbeat employment figures lessened the appeal for more
secure assets like government debt and convinced many investors
to favor equities.
 Toronto's key stock index rallied 1.4 percent at the start,
while U.S. equities also opened higher.
 The benchmark two-year Canadian government bond was down 10
Canadian cents at C$100.28 to yield 1.114 percent, while the
10-year bond slipped 70 Canadian cents to C$104.60 to yield
3.969 percent.
 The 30-year bond was off 95 Canadian cents at C$117.35 to
yield 3.969 percent.
 (Editing by Jeffrey Hodgson)