CANADA FX DEBT-Battered oil, jobs outlook yank C$ to six-year lows
(Adds comments, details, closing figures) * Canadian dollar at C$1.2790 or 78.19 U.S. cents * Bond prices higher across the maturity curve By Solarina Ho TORONTO, March 13 (Reuters) - The Canadian dollar closed at its weakest level against the U.S. dollar in six years on Friday as crude prices had their worst week in three months and February jobs data underscored expectations of a soft labor market in the coming months. Canadian jobs decreased by 1,000 in February, compared with forecasts for a loss of 5,000, but cuts in the natural resource sector suggested the effects of plunging crude prices were starting to trickle through the country's oil-exporting economy. Losses in the manufacturing sector also dampened sentiment. "Even though (the jobs figures) were better than expected, it still reinforced the fact that the Canadian labor market will remain soft in next few months," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. "We're likely to see continued monetary policy divergence between the Federal Reserve and the Bank of Canada, along with the downward movement in oil prices that are really hitting the loonie hard." U.S. crude prices sank more than 4 percent on Friday, hit by a renewed U.S. dollar rally and warnings by the International Energy Agency that global oversupply is intensifying. Brent crude fell more than 2 percent. The Canadian dollar ended the North American session at C$1.2790 to U.S. dollar, or 78.19 U.S. cents, weaker than Thursday's close of C$1.2703, 78.72 U.S. cents. Earlier in the session it touched C$1.2824, or 77.97 U.S. cents, its weakest since March 2009. Smith said the market was still having trouble keeping the loonie weaker than the psychologically key C$1.28 level. Market focus early next week will be on the Fed's next interest rate decision on Wednesday and on how the Fed will adjust its forward-guidance language. The U.S. central bank is widely expected to hike rates in the coming months, a sharp contrast to the stance of the Bank of Canada and other central banks around the world. Canadian government bond prices were higher across the maturity curve, with the two-year up 3.5 Canadian cents to yield 0.557 percent and the benchmark 10-year rising 18 Canadian cents to yield 1.477 percent. (Reporting by Solarina Ho; Editing by Meredith Mazzilli and Peter Galloway)
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