CANADA FX DEBT-C$ rallies after Canadian jobs data

Fri Sep 10, 2010 8:23am EDT
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 * C$ hits high of 97.21 U.S. cents
 * Canada adds 35,800 jobs in August
 * Bond prices mixed
 By Claire Sibonney
 TORONTO, Sept 10 (Reuters) -  The Canadian dollar rallied
against the greenback to hit a fresh three-week high on Friday
after domestic jobs data for August came in stronger than
 The currency benefited from news that Canada's economy
added 35,800 jobs in August, slightly more than consensus. The
headline number left an initial impression that the labor
market was picking up a little steam. [ID:nSCLAKE65B]
 After the data, the Canadian dollar CAD=D4 rose around 30
pips to touch a session high of C$1.0287 versus the U.S.
dollar, or 97.21 cents, its strongest since Aug. 19.
 Doug Porter, deputy chief economist at BMO Capital Markets,
noted that employment excluding education had actually fallen.
"The majority of industries actually saw declines of
employment in the month. The initial reaction has been to bid
the Canadian dollar stronger, but I think after the details are
digested, it might be seen as a bit of a disappointment later
today," he said.
 Analysts said the numbers did little to sway expectations
regarding the Bank of Canada's next interest rate decision in
 The central bank nudged its overnight rate target up by 25
basis points to 1 percent on Wednesday and, contrary to most
economists' expectations, did not signal a subsequent pause in
rate hikes. Most primary dealers polled by Reuters, however,
see a pause for the remainder of the year. [ID:nN08241537]
 "I think that the Canadian dollar, when you look at it more
broadly, is going to be more dictated by events abroad, so in
terms of how much legs this report will have, I think it really
depends on what we see in U.S. demand activity numbers over the
next several weeks and as well what happens broadly in terms of
risk aversion," said Mark Chandler, head of Canadian fixed
income and currency strategy at RBC Capital Markets.
 "I think we've gone as far as we can on the domestic data
and policy moves in Canada."
 At 7:52 a.m. (1152 GMT), the Canadian dollar CAD=D4 stood
at C$1.0307 to the U.S. dollar, or 97.02 U.S. cents, up from
Thursday's finish at C$1.0337 to the U.S. dollar, or 96.74
U.S. cents.
 The commodity-linked currency was already slightly firmer
heading into the report, partly supported by a jump in crude
oil prices. [O/R]
 Later in the day, Bank of Canada Governor Mark Carney will
participate in a conference of finance officials at Spruce
Meadows in Alberta.
  As investors digested the details of the jobs report,
domestic bond prices were mixed while U.S. Treasuries rose,
recovering some ground after a sharp sell-off. [US/].
  The two-year Canada bond CA2YT=RR was unchanged at to
yield 1.467 percent, while the 10-year bond CA10YT=RR gained
11 Canadian cents to yield 2.951 percent.
  (Additional reporting by Euan Rocha; Editing by Frank