CANADA FX DEBT-C$ hits 1-month high after strong domestic jobs report

Fri Apr 4, 2014 4:32pm EDT

* Canadian dollar at C$1.0981 or 91.07 U.S. cents
    * Bond prices higher across the maturity curve

 (Adds details, quote, updates prices)
    By Leah Schnurr
    TORONTO, April 4 (Reuters) - The Canadian dollar firmed
against the greenback on Friday to its strongest in nearly a
month, bolstered by data showing the domestic economy added
twice as many jobs as expected in March.
    Employers created 42,900 jobs last month, well ahead of the
20,000 that analysts had expected, while the unemployment rate
declined for the first time this year, to 6.9 percent. The gain
comes on the heels of a loss of 7,000 jobs in
February. 
    "This is really positive for the loonie, it gives people a
sense of confidence that was almost nonexistent two or three
weeks ago," said Rahim Madhavji, president at
KnightsbridgeFX.com in Toronto.
    At the same time, separate data south of the border showed
U.S. employers kept up a steady pace of hiring last month with
192,000 new jobs. Still, the figure was slightly below
expectations and the divergence between the U.S. and Canadian
numbers helped further support the loonie. 
    "The combination of an as-expected U.S. report and a solid
Canadian number has given the Canadian dollar a bit of a boost,"
said Doug Porter, chief economist at BMO Capital Markets in
Toronto. 
     "I don't believe either report is a real game changer, I
don't think either one changes the broader landscape of the
North American economy, but at least for today this is a nice
boost for the loonie."
    The Canadian dollar ended the North American
session at C$1.0981 to the greenback, or 91.07 U.S. cents,
stronger than Thursday's close of C$1.1039, or 90.59 U.S. cents.
    The loonie hit a session high of C$1.0957 shortly after the
jobs reports were released, the highest level since early March.
For the week, the U.S. dollar depreciated 0.6 percent against
the Canadian dollar.
    The strong jobs report at home was still unlikely to alter
the Bank of Canada's stance, analysts said. The central bank has
been a major driver of the Canadian dollar's direction since it
shifted the tone of its policy last year.
    The data pushed the loonie through the C$1.10 level, which
had served as significant resistance. Since touching a
4-1/2-year low two weeks ago, the loonie has rebounded but the
grind higher has been slow.
    "I think the Canadian dollar may be in a short-term up
trend, (but) I think it's still facing a lot of resistance,"
said Madhavji.
    The loonie will likely see a range of C$1.08 to C$1.11, he
said.
    Canadian government bond prices were higher across the
maturity curve, with the two-year was up 2 Canadian
cents to yield 1.091 percent, and the benchmark 10-year
 was up 47 Canadian cents to yield 2.496 percent.

 (Additional reporting by Andrea Hopkins; Editing by Meredith
Mazzilli)
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