CANADA FX DEBT-C$ gets boost from strong Canadian, soft U.S. jobs data
* C$ firms to C$1.0401 vs US$, or 96.14 U.S. cents * Canada creates 59,200 jobs in August vs forecast of 20,000 * U.S. creates 169,000 jobs vs forecast of 180,000 * Bond prices rise across maturity curve By Solarina Ho TORONTO, Sept 6 (Reuters) - The Canadian dollar rallied to its firmest in about two and a half weeks after August employment figures were unexpectedly strong in Canada and weaker than forecast in the United States. The Canadian economy created 59,200 jobs last month, nearly triple the 20,000 jobs economists surveyed by Reuters had predicted. Most of the rebound was in part-time work, however. This follows a 39,400 loss in July. The unemployment rate nudged lower to 7.1 percent from 7.2 percent. "The headline is outstandingly strong and once again it reinforces the volatility we've been getting in the Canadian job numbers," said Craig Alexander, chief economist at Toronto-Dominion Bank. "It's averaging around 12,000 a month, which is a lackluster pace of employment growth and is consistent with an economy that is growing at a modest pace." In the United States, 169,000 jobs were created, missing economists' expectations of 180,000 new jobs. The unemployment rate fell to a 4-1/2 year low as workers gave up looking for work. "Obviously the mix between Canada and the U.S. is quite marked and we've seen a violent reaction in the Canadian dollar in particular," said Doug Porter, chief economist at BMO Capital Markets. The Canadian dollar was trading at C$1.0401 versus the U.S. dollar, or 96.14 U.S. Cents at 9.00 a.m. (1300 GMT) after touching as firm as C$1.0387, or 96.27 U.S. cents. This was more than a cent stronger than Thursday's close at C$1.0506, or 95.18 U.S. cents. The U.S. figures could push back expectations on when the Federal Reserve will begin trimming its massive bond purchasing. The central bank was widely expected to begin scaling back stimulus when it meets in mid-September. The data did not change expectations the Bank of Canada will keep interest rates on hold at its next policy meeting. A Reuters poll last week showed economists were forecasting the next interest rate hike would take place during the fourth quarter of 2014. The currency was mostly outperforming its key counterparts. It was trading at its strongest level in about five weeks against the euro and the Japanese yen. Prices for Canadian government debt extended gains after the data, with the two-year bond rising 4 Canadian cents to yield 1.285 percent and the benchmark 10-year bond climbing 41 Canadian cents to yield 2.759 percent.
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