April 5, 2019 / 2:10 PM / 7 months ago

CANADA FX DEBT-C$ hits one-week low as job boom fades

    * Canadian dollar dips 0.2% against the greenback
    * Canada sheds 7,200 jobs in March
    * Loonie touches its weakest since March 29 at 1.3403
    * Price of U.S. oil rises 0.5%
    * Canadian bond prices trade mixed across the yield curve

    By Fergal Smith
    TORONTO, April 5 (Reuters) - The Canadian dollar weakened to
a one-week low against its U.S. counterpart on Friday as
domestic data showed an unexpected jobs decline in March
following outsized gains in the last two months which had helped
support the currency.
    The Canadian economy shed 7,200 jobs in March, Statistics
Canada data showed, while the unemployment rate held steady at
5.8 percent. Analysts in a Reuters poll had forecast a marginal
gain of 1,000 jobs.             
    "There's nothing great about this report, but first-quarter
hiring still looks very brisk, if anything still too brisk for
an economy that's likely chugging along at a 1 percent to 1.5
percent growth rate," said Avery Shenfeld, chief economist at
CIBC Capital Markets in a note.    
    Chances of an interest rate cut this year from the central
bank nudged only slightly higher to 43 percent from 38 percent
before the data, the overnight index swaps market indicated.
    At 9:37 a.m. (1337 GMT), the Canadian dollar          was
trading 0.2% lower at 1.3387 to the greenback, or 74.70 U.S.
cents. The currency touched its weakest level since March 29 at
1.3403.
    The loonie has advanced 1.9% since the start of the year
even as it has lost ground since February, making it the second
best performing currency in the G10 after sterling.
     Still, strategists see little upside for the Canadian
dollar over the coming months, cutting their bullish forecasts
for the currency as worries about the global economy boost
demand for higher-yielding U.S. dollars, a Reuters poll showed.
            
     The U.S. dollar        was little changed on Friday against
a basket of major currencies after a jobs report for March
showed than U.S. job gains were better than expected during the
month while wage pressures were muted.             
    The price of oil, one of Canada's major exports, was
supported by mounting geopolitical risks. U.S. crude oil futures
       were up 0.5% at $62.40 a barrel.             
    Canadian government bond prices were mixed across the yield
curve, with the two-year            up 1 Canadian cent to yield
1.582% and the 10-year             flat to yield 1.700%.   

 (Reporting by Fergal Smith
Editing by Susan Thomas)
  
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