July 5, 2019 / 1:45 PM / 4 months ago

CANADA FX DEBT-C$ pulls back from 8-month high after surprise jobs decline

    * Canadian dollar weakens 0.4% against the greenback
    * Canada's economy sheds 2,200 jobs in June
    * Price of U.S. oil decreases 0.4%
    * Canadian bond prices decline across the yield curve

    TORONTO, July 5 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Friday, pulling back from an
eight-month high the day before, as the greenback broadly
climbed and after data showed a surprise drop in Canadian jobs
in June.
     Canada's economy shed a net 2,200 jobs in June after two
months of gains, but wages jumped by the most in more than a
year - a sign of strength analysts said ruled out the chances of
the Bank of Canada cutting interest rates next week.
                
    Chances that the central bank would cut rates this year
slipped to less than 20% from about 25% before the jobs data.
          
    The easing of Bank of Canada rate cut expectations came as
data showed a strong rebound in U.S. job growth. U.S. and
Canadian bond yields and the U.S. dollar        climbed after
the U.S. data.             
    At 9:19 a.m. (1319 GMT), the Canadian dollar          was
trading 0.4% lower at 1.3102 to the greenback, or 76.32 U.S.
cents. The currency, which on Thursday notched an eight-month
high at 1.3038, traded in a range of 1.3045 to 1.3130.
    For the week, the loonie was on track to dip 0.1%.
    The Canadian dollar will edge higher against the greenback
over the coming year, as a recovering domestic economy
forestalls Bank of Canada interest rate cuts despite expected
easing from the U.S. Federal Reserve, a Reuters poll predicted.
                
    The price of oil, one of Canada's major exports, declined on
Friday after weaker-than-expected German data added to worries
about the global economy. U.S. crude oil futures        were
down 0.4% at $57.09 a barrel.             
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
fell 11 Canadian cents to yield 1.581% and the 10-year
            was down 78 Canadian cents to yield 1.552%.
    The 10-year yield touched its highest intraday since May 30
at 1.555%.

 (Reporting by Fergal Smith; editing by Jonathan Oatis)
  
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