CANADA FX DEBT-C$ ekes out gain after stronger-than-expected jobs data

Fri Oct 11, 2013 9:30am EDT

By Solarina Ho
    TORONTO, Oct 11 (Reuters) - The Canadian dollar strengthened
to a session high on Friday after Canadian employment figures
came in stronger than expected, with the jobless rate falling
below 7 percent for the first time in nearly five years.
    Canada added 11,900 jobs in September and the unemployment
rate dropped to 6.9 percent, mostly due to fewer youths looking
for work, Statistics Canada said.  
    The gain surpassed the 10,000 new jobs forecast by
economists. The jobless rate, which stood at 7.1 percent in
August, touched the lowest since the 6.8 percent recorded in
December 2008.
    
    The average monthly job growth over six months, seen as a
more reliable gauge of the trend in the job market, was 23,100,
compared with 12,300 in the previous six-month period.
    "It is slightly CAD positive. However, in the context of
what was expected, combined with leading into a long weekend,
combined with the event risk we have in both Washington but also
with (Bank of Canada) Governor Poloz speaking this afternoon, it
is unlikely to have a dramatic reaction," said Camilla Sutton,
chief currency strategist for Scotiabank.
    The Canadian dollar was trading at C$1.0389 versus
the greenback, or 96.26 U.S. cents at 8:56 a.m. (1256 GMT),
stronger than just prior to the data's release and marginally
stronger than Thursday's North American finish at C$1.0396, or
96.19 U.S. cents.
    The loonie touched its firmest level of the day earlier at
C$1.0376, or 96.38 U.S. cents. Its performance was mixed against
other major currencies ahead of Canada's Thanksgiving long
weekend.
    At one point, it traded at its weakest level in more than
five months against the New Zealand dollar and more
than four months against the Australian dollar.
    In the United States, hopes that the standoff over the
country's budget was coming to an end, helped lift the
greenback. Fears of a possible U.S. debt default have damaged
the credibility of the world's largest economy and hurt the
dollar. 
    Republican leaders and President Barack Obama seemed
prepared to finalize a deal that would get the government back
in operation. One Republican said an agreement could come on
Friday, but hurdles remain. 
    Government bond prices were higher across the maturity
curve. The two-year bond rose 1 Canadian cent to
yield 1.206 percent, while the benchmark 10-year bond
 rose 5 Canadian cents to yield 2.586 percent.
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