CANADA FX DEBT-C$ weakens as strong U.S. jobs figures signal Fed rate rise
* C$ at C$1.2465, or 80.22 U.S. cents * Bond prices lower across the curve By Alastair Sharp TORONTO, Feb 6 (Reuters) - The Canadian dollar weakened slightly on Friday after both Canada and the United States released monthly employment data for January. Both headline figures were strong, but the gain of 257,000 jobs in the United States, as well as rising wages there, left traders adding to bets that the U.S. Federal Reserve will begin raising interest rates by midyear. In Canada, rates are expected to decline. Canada added 35,400 jobs, far more than forecast, although the gains came on the back of more part-time positions, data showed. "I think the strong U.S. numbers keep some downward pressure on the Canadian dollar," said Paul Ferley, assistant chief economist at Royal Bank of Canada. "I think the Canadian employment numbers will probably sort of temper downside on the Canadian dollar, but I think the strong U.S. number has increased probability that the U.S. Fed will return to tightening mode sometime this year, and that will keep pressure on the Canadian dollar." The Canadian currency hit C$1.25, or 80 U.S. cents, soon after the reports were released, before settling at around C$1.2465, or 80.22 U.S. cents. It closed on Thursday at C$1.2424. "It's mildly supportive for the currency," said Doug Porter, Bank of Montreal's chief economist. "But, of course, it lands on the same day as we've got a very powerful U.S. report, especially with revisions, so I suspect that might outweigh this figure for the currency." Canadian government bond prices were lower across the maturity curve, with the two-year down 7.5 Canadian cents to yield 0.471 percent and the benchmark 10-year was down 18 Canadian cents to yield 1.385 percent. (Reporting by Alastair Sharp; Editing by Bernadette Baum; and Peter Galloway)
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