CANADA FX DEBT-C$ weakens after domestic jobs market shrinks in July

Fri Aug 9, 2013 9:39am EDT
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* C$ at C$1.0351 vs US$, or 96.61 U.S. cents
    * Fall in domestic jobs data weakens currency

    By Alastair Sharp
    TORONTO, Aug 9 (Reuters) - The Canadian dollar slipped half
a cent against the U.S. dollar on Friday after an unexpected
fall in domestic employment data for July.
    Record public sector job losses and scarce employment
opportunities for youth pushed the economy to shed a net 39,400
jobs during the month, compared to the 10,000 gain expected in a
Reuters poll. 
    The Canadian dollar weakened swiftly on the news, pushing to
a session low of C$1.0352, although it was still well clear of
the C$1.04 range it was trading in earlier in the week.
    "With this print, on the back of nothing else on the data
calendar, the weakness in the Canadian dollar makes sense and we
may stick fairly close to the top of the range for the rest of
the day," said David Tulk, chief Canada macro strategist at TD
    At 9:21 a.m. (1321 GMT) the Canadian dollar was
trading at C$1.0351 to the greenback, or 96.61 U.S. cents,
compared with C$1.0324, or 96.86 U.S. cents, at Thursday's North
American close.
    The currency has in recent weeks moved most forcefully on
external developments, and the typically volatile employment
data may yet be subsumed by global markets and monetary policy.
    "There's so many other big things that are happening with
respect to the Canadian dollar, whether it is the trajectory of
commodity currencies generally ... or the questions surrounding
Fed policy, which we think are ultimately likely to be a bigger
factor than these fundamentals," said Dov Zigler, financial
markets economist at Scotiabank.
    Prices for Canadian government debt were mostly higher,
though prices slipped at the long end of the curve. The two-year
bond gained 2.5 Canadian cents to yield 1.129
percent, and the benchmark 10-year bond rose 7
Canadian cents to yield 2.490 percent.