CANADA FX DEBT-C$ weakens after surge in U.S. jobs

Fri May 2, 2014 4:58pm EDT
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* Canadian dollar at C$1.0980 or 91.07 U.S. cents

* Bond prices higher across the maturity curve (Adds analyst's comment, updates prices)

By Alastair Sharp

TORONTO, May 2 (Reuters) - The Canadian dollar weakened on Friday after strong U.S. jobs data boosted the greenback, although the notion of a U.S. economic recovery without interest rate hikes helped the domestic currency win back some ground.

"What was really impressive was the way the loonie stormed back after falling" in the immediate aftermath of the U.S. jobs data, said Adam Button, a currency analyst at ForexLive in Montreal. "It's been a good news week for the Canadian dollar."

The loonie, as Canada's currency is colloquially known, gained 0.5 percent on the week.

The U.S. employment report showed strong job growth plus low wage inflation, which Button said might point to a stronger U.S. economy without a heightened risk of rate hikes.

"That's a best case scenario for Canada," he said.

Canada sends most of its exports south of the border, and so an uptick in U.S. demand should aid the Canadian economy. The slow pace of growth in exports has come under closer scrutiny from the Bank of Canada recently.   Continued...