C$ hits six-month high on strong Canada jobs data

Fri May 8, 2009 7:49am EDT
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TORONTO May 8 (Reuters) - The Canadian dollar shot to a six-month high against the U.S. dollar on Friday after data showed an unexpected rise in the number of Canadian jobs created last month.

The Canadian economy gained 35,900 jobs in April, defying average expectations for a decline of 50,000. The unemployment rate held steady at 8.0 percent, compared with a forecast for an increase to 8.3 percent.

It popped as high as C$1.1577 to the U.S. dollar, or 86.38 U.S. cents, from a pre-data level of C$1.1613 to the U.S. dollar, or 86.11 U.S. cents.

The Canadian dollar had already begun rallying ahead of the report. It had finished at C$1.1725 to the U.S. dollar, or 85.29 U.S. cents, at Thursday's North American close.

Next up to challenge the currency markets is the U.S. jobs data for April. The Canadian dollar pared gains as a wait-and-see mood prevailed ahead of U.S. jobs data for April due at 8:30 a.m. (1230 GMT). A Reuters poll of economists forecast that 590,000 non-farm jobs were lost compared with a loss of 663,000 in March.

"I guess the only test would be is if we get anything similar like this from the U.S. employment report later on. I strongly doubt that we are going to see a positive number out of the U.S.," said Doug Porter, deputy chief economist, at BMO Capital Markets.

"So I think on balance the reports will be positive for the Canadian dollar." (Reporting by Ka Yan Ng; Editing by Jeffrey Hodgson)