April 3, 2009 / 2:19 PM / in 11 years

CANADA FX DEBT-C$ edges higher, bonds lower after US jobs

 * US March payrolls fall 663,000, jobless rate 8.5 pct
 * Canadian dollar slightly higher after U.S. jobs numbers
 * Bonds lower as stocks make tentative gains
 TORONTO, April 3 (Reuters) - The Canadian dollar was
slightly higher on Friday morning against a greenback that was
making safe-haven gains against other currencies as appetite
for risk wavered after U.S. data showed more job losses last
 The U.S. job losses were smaller than at the start of the
year, but they also dampened hopes that economic recovery was
well under way.
 The U.S. economy shed 663,000 jobs in March, more than
expectations of a drop to 650,000. The unemployment rate rose
to 8.5 percent, as forecast. [ID:nL3944423]
 The Canadian dollar pushed to around C$1.2350 to the U.S.
dollar following the U.S. news, but then pared gains.
 "I guess it's good news when the figures don't surprise on
the downside. But the job losses are still very broadly based
and there's no hint of a slowing in the job losses," said Sal
Guatieri, senior economist at BMO Capital Markets.
 "I think this report might help the markets consolidate the
recent gains but it's still a fairly bleak assessment of the
current economy."
 At 9:45 a.m. (1445 GMT), the currency was at C$1.2381 to
the U.S. dollar, or 80.77 U.S. cents, up modestly from
C$1.2409 to the U.S. dollar, or 80.59 U.S. cents, at Thursday's
 The Canadian dollar was under mild pressure from the
softening price of oil CLc1, a key Canadian export.
 Appeal for riskier assets spurred by optimism from the G20
summit in London helped push the Canadian dollar to its highest
level against the U.S. dollar in nearly a week on Thursday.
 Canadian government bond prices were lower across the curve
as job losses in the United States were not as bad as some
market players had feared.
 "The market has taken it in a more favorable light but
that's probably only because the whisper number may have been
for a much, much bigger decline," Guatieri said.
 Optimism about an economic recovery has tended to draw
investors to switch out of safe haven investments and into
riskier markets such as equities. North American stocks opened
tentatively higher on Friday.
 Finance Minister Jim Flaherty said in a speech in London
that he expected the Canadian economy to have a "difficult
year." [ID:nL3386614]
 "Our employment numbers are challenging, we are going to
have more bad numbers on employment."
 Canada jobs figures for March are due next Thursday.
 The two-year bond fell 2 Canadian cents to C$100.26 to
yield 1.127 percent. The 10-year bond retreated 28 Canadian
cents to C$107.47 to yield 2.894 percent.
 The 30-year bond eased 50 Canadian cents to C$124 to yield
3.632 percent. The U.S. 30-year bond yielded 3.603 percent.
 (Reporting by Ka Yan Ng; editing by Peter Galloway)

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