December 2, 2016 / 10:27 PM / a year ago

CANADA FX DEBT-C$ notches a 6-week high on jobs gain, oil rally

(Adds analyst quotes and details on CFTC data and updates
prices)
    * Canadian dollar ends at C$1.3283, or 75.28 U.S. cents
    * Loonie touches its strongest since Oct. 21 at C$1.3254
    * Currency rises 1.8 percent for the week
    * Bond prices higher across the yield curve

    By Fergal Smith
    TORONTO, Dec 2 (Reuters) - The Canadian dollar notched a
six-week high against its U.S. counterpart on Friday as domestic
jobs rose for the fourth straight month and oil climbed,
sustaining strength since OPEC's decision midweek to cut crude
output.
    For the week, the loonie rose 1.8 percent, its biggest gain
in eight months.
    "Everything went well for the Canadian dollar this week,"
said Adam Button, currency analyst at ForexLive, including an
agreement by the Organization of the Petroleum Exporting
Countries to cut output, as well as stronger-than-expected gross
domestic product and employment data.
    The Canadian economy added 10,700 jobs in November, which
bucked analysts' forecasts for a loss of 20,000 jobs after two
months of growth and reinforced expectations that the Bank of
Canada will keep interest rates unchanged next week and for all
of 2017. 
    It is likely that the central bank will be more upbeat next
week due to higher oil prices, stronger economic data and
greater investor optimism about the economic outlook since
Donald Trump won the U.S. presidential election, Button said.
    "There has been no indication that he (Trump) wants to pick
a (trade) fight with Canada ... instead he is going to make it
easier for Canadian oil companies to get oil to the market."
     Trump has said he would like to revive the Keystone XL oil
pipeline project. 
    U.S. crude oil futures settled up 62 cents at $51.68
a barrel, posting its biggest weekly gain since early 2011, with
a rise of 12 percent.
    The Canadian dollar ended at C$1.3283 to the
greenback, or 75.28 U.S. cents, stronger than Thursday's close
of C$1.3317, or 75.09 U.S. cents.
    The currency's weakest level of the session was C$1.3319,
while it touched its strongest since Oct. 21 at C$1.3254.
    The U.S. dollar fell against a basket of currencies
despite a solid rise in U.S. jobs data, with investors taking a
cautious stance before Italy's referendum on constitutional
reform on Sunday.  
    Speculators increased bearish bets on the Canadian dollar,
according to Commodity Futures Trading Commission data. Net
short Canadian dollar positions rose to 18,576 contracts in the
week ended Nov. 29 from 17,462 in the prior week.
    Canadian government bond prices were higher across a flatter
yield curve in sympathy with U.S. Treasuries. The two-year
 price rose 4 Canadian cents to yield 0.736 percent
and the benchmark 10-year climbed 46 Canadian cents
to yield 1.621 percent.

 (Reporting by Fergal Smith; Editing by Lisa Shumaker)

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