CANADA FX DEBT-C$ leaps to 1-week high as US jobs data impresses

Fri Nov 2, 2012 4:43pm EDT
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* C$ ends at C$0.9956 to US$, or $1.0044
    * C$ ends week up 0.2 percent
    * U.S. jobs data robust, Canadian employment figures muted
    * Canadian bond prices rise

    By Claire Sibonney
    TORONTO, Nov 2 (Reuters) - The Canadian dollar jumped to a
more than one-week high against its U.S. counterpart on Friday
and outperformed all other major currencies after data showed
U.S. employers stepped up hiring in October.
    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. 
    "We would have thought initially at first blush that the
weakness in the Canadian data would have mitigated Canadian
dollar gains," said Jack Spitz, managing director of foreign
exchange at National Bank Financial.
    "That has not turned out to be the case."
    The currency hit an intraday high of C$0.9921, or $1.0080,
its strongest level since Oct. 25, even though the U.S. dollar
 itself rallied to a near two-month peak against a basket
of currencies after the release of the U.S. jobs numbers, the
last major report card on the economy before Tuesday's
presidential election. 
    The Canadian dollar ended the North American
session at C$0.9956 to the greenback, or $1.0044, compared with
Thursday's close of C$0.9968, or $1.0032. It ended the week up
0.2 percent.
    "The financial market flows, the (speculative) flows, asset
management flows, real money flows have all been selling U.S.
dollars against Canada," Spitz said.
    Looking ahead, he said he saw U.S. dollar support around
C$0.9890-9900 and resistance around the 200-day moving average
near parity.
    The Canadian dollar gave back some early gains on Friday as
global stocks and crude oil prices retreated, with investors
looking beyond next week's U.S. presidential vote to the looming
U.S. "fiscal cliff". 
    Still, the Canadian dollar outperformed on the crosses,
strengthening to a one-week high against the Australian dollar
 and a more than two-week high against the euro
    Data showed the Canadian job market stalled in October after
two months of strong hiring, confirming expectations that
employment gains would ease to reflect 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 turned higher,
climbing across the yield curve and outperforming U.S.
    The two-year bond rose 2 Canadian cents to yield
1.069 percent, and the benchmark 10-year bond gained
13 Canadian cents to yield 1.773 percent.