CANADA FX DEBT-C$ hits one-week low after jobs data, pares losses

Fri Jul 8, 2016 9:47am EDT
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* Canadian dollar at C$1.3022 or 76.79 U.S. cents
    * Bond prices mostly higher across the maturity curve

    By Alastair Sharp
    TORONTO, July 8 (Reuters) - The Canadian dollar on Friday
weakened against its U.S. counterpart on Friday after data
showed the domestic economy unexpectedly shed 700 jobs and U.S.
employment growth surged in June.
   Shortly after the release of the data, the Canadian dollar
 hit its lowest level since June 28 at C$1.3082 to the
greenback, or 76.44 U.S. cents.
    It then trimmed losses to trade at C$1.3022, or 76.79 U.S.
cents at 9:40 a.m. EDT (1340 GMT), compared with Thursday's
official Bank of Canada close of C$1.3003, or 76.91 U.S. cents.
    While the Canadian jobs report was weaker than expected, the
move in the currency pair likely had more to do with the
increase in U.S. hiring, economists said.
    "I would say the Canadian number is neither here nor there,"
said Doug Porter, chief economist at BMO Capital Markets. "It's
probably on balance slightly softer than expected but the U.S.
number is considerably stronger than expected, and I think that
would be the main weight on the Canadian dollar today."
    Canada lost 700 jobs when the market was expecting a 5,000
job increase, while the unemployment rate dipped as less people
sought work, Statistics Canada said. 
    U.S. nonfarm payrolls rose by 287,000 jobs last month, the
largest gain since last October, the U.S. Labor Department said.
 May's payroll count was revised down to only 11,000 from the
previously reported 38,000. 
    The loonie, as Canada's currency is colloquially known, was
weaker against a string of other currencies too.
    Canadian government bond prices were mostly higher across
the maturity curve, though the two-year price slipped
1 Canadian cent to yield 0.471 percent. The benchmark 10-year
 jumped 17 Canadian cents to yield 0.961 percent.
    The Canada-U.S. two-year bond spread widened to -15.3 basis
points, while the 10-year spread was -41.9 basis points.

 (Additional reporting by Allison Martell Editing by W simon)