CANADA FX DEBT-C$ hit by disappointing jobs data

Fri Mar 7, 2014 9:32am EST

* Canadian dollar at C$1.1082 or 90.24 U.S. cents
    * Bond prices lower across the maturity curve

    By Leah Schnurr
    TORONTO, March 7 (Reuters) - The Canadian dollar slumped
against the greenback on Friday after data showed the domestic
economy unexpectedly shed jobs last month, in contrast to an
acceleration of jobs growth south of the border.
    Canada lost 7,000 jobs in February, far short of
expectations for an increase of 15,000. The unemployment rate
held steady at 7 percent, but the data was unlikely to give the
Bank of Canada much reason to change its neutral policy stance.
 
    The report was a setback for the loonie after two sessions
of strong gains that pushed it to a two-week high on Thursday.
    "The Bank of Canada made it clear it's data dependent, so in
that context, it's natural we're seeing the Canadian dollar
weaken," said Shaun Osborne, chief currency strategist at TD
Securities in Toronto.
    "We'll probably test the C$1.11 area here over the balance
of the session or the balance of the morning, we'll see if we
can extend this move a little more. I think on balance we
should, given the data mix we've had but I don't know that we're
going to extend much higher past C$1.11, at the moment anyway."
    The Canadian dollar was at C$1.1082 to the
greenback, or 90.24 U.S. cents, weaker than Thursday's close of
C$1.0992, or 90.98 U.S. cents. The loonie hit a session low of
C$1.1098 shortly after the data was released.
    A separate report showed Canada's trade deficit narrowed
more than expected, but that silver lining was eclipsed by the
employment data.
    Data south of the border boosted the greenback to the
Canadian dollar's detriment as the U.S. added 175,000 jobs in
February, beating expectations. 
    Canadian government bond prices were lower across the
maturity curve, with the two-year off 1.5 Canadian
cents to yield 1.060 percent and the benchmark 10-year
 was down 40 Canadian cents to yield 2.552 percent.
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