CANADA FX DEBT-C$ touches highest since June 1 after jobs data
* C$ at C$0.9727 to the U.S. dollar, or $1.0280
* Canadian jobs growth stronger than expected
* Bonds mixed across curve
By Solarina Ho
TORONTO, June 9 (Reuters) - The Canadian dollar powered to its strongest level since the beginning of June against the greenback following the release of better-than-expected domestic employment data on Friday.
Canada's unemployment rate fell to 7.4 percent in May from 7.6 percent as 22,300 jobs were added, marked by a solid shift toward full-time, private-sector employment, according to Statistics Canada data.
This was slightly better than the 20,000 jobs expected by analysts, who also predicted the jobless rate would remain at 7.6 percent.
"There were certainly fears out there that after such a big job gain in April, we might even see a flat or declining figure for May," said Avery Shenfeld, chief economist at CIBC World Markets.
"The fact that we really held onto to the gains in the prior month in paid employment and gained some self-employment jobs was a plus."
At 7:29 a.m. (1129 GMT), the currency CAD=D4 stood at C$0.9727 to the U.S. dollar, or $1.0280, stronger than Thursday's North American finish of C$0.9731 to the U.S. dollar, or $1.0276. It had strengthened to as high as C$0.9711, or $1.0298, just after the report, its firmest level since June 1.
"The dollar is getting I think increasingly more comfortable with the view that the Bank of Canada will be raising interest rates and that environment looks likely to continue to support the Canadian dollar," said Royal Bank of Canada Chief Economist Craig Wright.
Overnight index swaps, which trade based on expectations for the Bank of Canada's key policy rate, showed investors pricing in slightly higher odds of tightening at policy announcements in September, October and December.
The Bank of Canada is widely expected to raise interest rates in September, according to a May 31 poll of primary dealers. [CA/POLL]
Canadian money market and short term bond yields were mixed, though bond prices were most softer than just before the jobs data
The two-year bond CA2YT=RR was down 3 Canadian cents to yield 1.457 percent, while the 10-year bond CA10YT=RR added 9 Canadian cents to yield 3.026 percent. (With additional reporting by Pav Jordan and Euan Rocha; Editing by Jeffrey Hodgson)
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