CANADA FX DEBT-C$ strengthens to 1-week high after job reports

Fri Nov 2, 2012 9:44am EDT
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* C$ at C$0.9944 to US$, or $1.0056
    * U.S. jobs data robust, Canadian employment muted
    * Price of Canadian bonds fall

    By Alastair Sharp
    TORONTO, Nov 2 (Reuters) - The Canadian dollar strengthened
to a one-week high against its U.S. counterpart on Friday after
data showed that U.S. employers stepped up hiring in October
even as Canadian jobs growth slowed.
    The currency brushed off a tepid domestic employment report
to cheer a larger-than-expected gain in U.S. payrolls that
signaled hope for an economic recovery in Canada's biggest
trading partner. 
    "What we're seeing is a rally in risk-related assets,
including the Canadian dollar, because of a better-than-expected
U.S. employment reading," said Doug Porter, deputy chief
economist at BMO Capital Markets.
    At 9:25 a.m. (1325 GMT) the Canadian dollar was
trading at C$0.9944 to the greenback, or $1.0056, despite the
U.S. currency itself hitting a near two-month high against a
basket of currencies. 
    The Canadian dollar closed Thursday's North American session
at C$0.9968, or $1.0032.
    The currency at one point hit C$0.9936, its strongest level
since Oct. 25.
    It also firmed against other major currencies, including the
euro, Australian dollar and yen.
    The Canadian job market stalled in October after two months
of strong hiring, reflecting sluggish economic growth.
    "After the strong gains that we saw over the last couple of
months, it's not too surprising to find the Canadian labor
market take a bit of a breather," said David Tulk, chief Canada
macro strategist at TD Securities. 
    "It's consistent with growth slowing into Q3 and then
recovering slowly thereafter," Tulk said.
    The Canadian economy shrank in August for the first time in
six months, an unexpected contraction that pointed to a sharp
slowdown in third-quarter growth. 
    The price of Canadian government debt fell across most of
the yield curve, with the two-year bond down 3
Canadian cents to yield 1.089 percent, and the benchmark 10-year
bond slipping 15 Canadian cents to yield 1.803