Loonie hits 2 1/2-month high on jobs data hopes

Thu Jan 7, 2010 9:32am EST
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By Jennifer Kwan

TORONTO (Reuters) - The Canadian dollar climbed against the U.S. dollar on Thursday, lifted by market expectations that a pair of jobs reports in Canada and U.S. on Friday will bolster recovery hopes.

The unit shot as high as C$1.0291 to the U.S. dollar, or 97.17 U.S. cents, largely driven up by bullish market sentiment, said Steve Butler, director of foreign exchange trading at Scotia Capital.

"For the time being, Canada can do no wrong. We've seen dollar/Canada continue to grind lower," he said.

A main factor behind the rosy sentiment is market expectation that jobs reports due on Friday morning could provide further clarity the economic recovery is firmly underway.

"The market is expecting good news out of the jobs data both in the U.S. and Canada tomorrow, and it's that expectation that is keeping Canada outperforming," said Butler.

At 9:15 a.m., the Canadian dollar was at C$1.0315 to the U.S. dollar, or 96.95 U.S. cents, up from Wednesday's finish at C$1.0325 to the U.S. dollar, or 96.85 U.S. cents.

Butler added the Canadian dollar continued its ascent even as the usual barometers that drive it higher were in fact weaker, including a sagging price of oil below $83 a barrel and softer gold prices.

Global equity markets, typically a gauge of risk appetite, were also lower, pressured in part by signals of possible tighter monetary policy in China, he added.   Continued...

<p>A Canadian one dollar coin, also know as a loonie, is shown in Montreal in this April 28, 2006 file photo. REUTERS/Shaun Best</p>