CANADA FX DEBT-C$ hits 5-week low as growth fears roil markets

Fri Aug 5, 2011 12:44pm EDT
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* C$ hits C$0.9851 to the U.S. dollar, or $1.0151

* Reaches fresh 5-week low despite U.S. jobs report

* Economic fears persist, flight to safe-havens resumes

* Bond prices mostly weaker (Updates, adds details, analyst comment)

By Andrea Hopkins

TORONTO, Aug 5 (Reuters) - Canada's dollar weakened to a five-week low against the U.S. currency on Friday, as solid U.S. job growth failed to offset fears about a possible U.S. downgrade and broad anxiety about the global economy.

Stonger-than-expected U.S. employment data and a mixed Canadian jobs report initially reassured investors that the U.S. economy was not falling back into recession. But sober second thoughts about economic weakness and ongoing speculation that U.S. sovereign debt may be downgraded spooked markets. [ID:nN1E7740O8]

"We're just having fairly volatile sessions overall across asset classes, same with equities -- it's been negative, then positive, then negative. There's a lot of negativity and certainly the Canadian dollar is subject to that," said Camilla Sutton, chief currency strategist at Scotia Capital.

"There is a lot of speculation about what is ahead and one of the rumors in the marketplace is whether or not the U.S. will suffer a downgrade over the weekend. There is tremendous amount of uncertainty generally," she added.   Continued...