June 5, 2020 / 7:58 PM / a month ago

CANADA FX DEBT-Canadian dollar adds to weekly gain after shock jobs rebound

 (Adds investor quotes and details throughout; updates prices)
    * Canadian dollar gains 0.5% against the greenback
    * Canada adds 290,000 jobs in May
    * Loonie touches its strongest since March 6 at 1.3391
    * Canada's 10-year yield rises to its highest since
mid-April

    By Fergal Smith
    TORONTO, June 5 (Reuters) - The Canadian dollar strengthened
to a near three-month high against the greenback on Friday and
was up more than 2% for the week after data showing a surprise
rebound in domestic and U.S. jobs supported investor optimism
about economic recovery.    
    Canada's economy gained 290,000 jobs in May, a rise of 1.8%
from April, surprising economists who had forecast that
record-breaking job declines over recent months would continue.
            
    The United States, Canada's largest trading partner, also
posted surprise gains for May, while shares on Wall Street
       climbed about 2.5%.             
    Despite the large Canadian jobs gain and the potential for
another increase in June as easing of restrictions becomes more
widespread across the country, investors doubt the Bank of
Canada will be scaling back its support for the economy any time
soon.
    "Given this one data point, I don't think it is enough to
move the needle for the Bank of Canada," said Darcy Briggs, a
portfolio manager at Franklin Templeton Canada. "You have a big
hole (for the economy) to crawl out of."
    Canadian purchasing activity contracted in May but at a less
sharp rate than in the record-setting prior month, Ivey
Purchasing Managers Index (PMI) data showed.
    The Canadian dollar        was trading 0.5% higher at 1.3431
to the greenback, or 74.45 U.S. cents. The currency, which was
up 2.5% for the week, touched its strongest intraday level since
March 6 at 1.3391.
    The gain for the loonie came as oil, one of Canada's major
exports, rallied. U.S. crude oil futures        settled 5.7%
higher at $39.55 a barrel after the Organization of the
Petroleum Exporting Countries decided to move up discussions on
whether to extend record production cuts to Saturday.
            
    Canadian government bond yields were higher across the
curve. The 10-year             rose 5.7 basis points to 0.736%,
its highest since April 14.

 (Reporting by Fergal Smith; editing by Jonathan Oatis and
Richard Chang)
  
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