CANADA FX DEBT-C$ gets boost from unexpected job gains, higher oil

Fri Apr 10, 2015 4:40pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

(Updates with fresh comment from Scotiabank, closing figures)
    * Canadian dollar ends at C$1.2580 or 79.49 U.S. cents
    * Bond prices higher across the maturity curve

    By Solarina Ho
    TORONTO, April 10 (Reuters) - The Canadian dollar eked out a
modest gain against a rallying U.S. dollar on Friday after
domestic employment figures showed the economy unexpectedly
created jobs in March and as crude prices edged higher.
    Economists had expected the employment level to remain
unchanged in March, but data showed 28,700 new jobs. However,
the gains came from 56,800 new part-time positions that offset
the loss of 28,200 full-time posts. Unemployment remained steady
at 6.8 percent. 
    "We've had a broad move in the U.S. dollar, where most
currencies have lost substantial ground today. But for Canada,
it's been a different story," said Camilla Sutton, chief
currency strategist at Scotiabank.
    The Canadian dollar, which was outperforming nearly
all of its major currency counterparts, finished at C$1.2580 to
the greenback, or 79.49 U.S. cents. This was sharply higher than
prior to the data, and firmer than Thursday's Bank of Canada
close at C$1.2592, or 79.42 U.S. cents.
    The currency traded in a wide range during the session, from
as low as C$1.2667 to a high of C$1.2572. It weakened nearly 0.7
percent for the week.
    The loonie also strengthened as crude prices rose on easing
concerns that a nuclear deal with Iran could result in a fresh
glut of Iranian oil into an already plentiful market. Canada is
a major oil exporter and the currency has been sensitive to the
commodity's price moves. 
    "We've got two positive factors for the Canadian dollar that
have been enough to offset the broader U.S. dollar strengthening
moves that we've seen," said Sutton.
    A stronger greenback will remain a key driver going forward,
however. A slew of U.S. data is expected next week, and
domestically, markets are anticipating the Bank of Canada's next
policy statement and monetary policy report, due on Wednesday.
    Friday's jobs data reinforced the market's view that another
interest rate cut by the bank is presently unnecessary. Markets
had been bracing for a miserable report, given Governor Stephen
Poloz's comment that first quarter growth would be "atrocious."
    "Do you need more insurance policy at this point in time?"
said Stefane Marion, chief economist at National Bank Financial.
"I don't think so."
    Canadian government bond prices were mostly lower across the
maturity curve, with the two-year price down 2.5
Canadian cents to yield 0.525 percent and the benchmark 10-year
 slipping 3 Canadian cents to yield 1.375 percent.
    The Canada-U.S. two-year bond spread was -3.5, while the
10-year spread was -57.8.

 (Additional reporting by Susan Taylor; Editing by Lisa Von Ahn
and Richard Chang)