CANADA FX DEBT-C$ hits highest since July 2008 after jobs data

Fri Mar 12, 2010 7:51am EST
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 * C$ hits C$1.0160 to the U.S. dollar
 * Canada economy adds 21K jobs, lifts C$
 * Bonds lower after data
 By Jennifer Kwan
 TORONTO, March 12 (Reuters) - The Canadian dollar rose to
its highest level against the U.S. currency since July 2008 on
Friday after Canadian employment data came in slightly better
than forecasts.
 Canada's unemployment rate fell to 8.2 percent in February
from 8.3 percent in January as 20,900 more people found work in
the month, with all the gains coming from full-time jobs,
Statistics Canada said on Friday. [ID:N12253705]
 Economists surveyed by Reuters had forecast net job growth
of 20,000 jobs in February and an 8.3 percent unemployment
rate. ECONCA
 "It's a very strong labor report and dollar/Canada has
broken into a new 20-month low. Considering it wasn't released
on the same day as (U.S.) nonfarm (payrolls data) it could get
even more attention than it usually does. All in all, it's good
for the Canadian dollar," said Camilla Sutton, currency
strategist at Scotia Capital.
 The dollar touched C$1.0160 to the U.S. dollar, or 98.43
U.S. cents, from about C$1.0234, or 97.71 U.S. cents just
before the report.
 At 7:38 a.m. (1238 GMT), the Canadian dollar fell back
slightly to C$1.0173 to the U.S. dollar, or 98.30 U.S., still
up from C$1.0243 to the U.S. dollar, or 97.63 U.S. cents, at
Thursday's close.
 Yields on overnight index swaps, which trade based on
expectations for the Bank of Canada's key policy rate, edged
higher after the report, showing the market saw tightening as
slightly more likely than before the data.
 The Canadian dollar has been rallying in recent weeks on
expectations Canada could hike interest rates well ahead of the
United States.
 The market suggests there are high odds the rate, now at
0.25 percent, will be around 1 percent by October. BOCWATCH
 Bond prices were mostly lower after the domestic data, and
were also affected by moves in the United States, where
Treasuries prices were soft ahead of U.S. economic data due
later in the session and a Federal Reserve interest rate
meeting next week. [US/]
 (Reporting by Jennifer Kwan; Editing by Jeffrey Hodgson)