* C$ at C$1.0071 to the US$, or 99.30 U.S. cents
* Domestic trade surplus offset by U.S. jobless claims
* ECB rate cut boosts both North American currencies
By Alastair Sharp
TORONTO, May 2 The Canadian dollar strengthened
against its U.S. counterpart on Thursday after the domestic
economy posted a surprise trade surplus, though the gain was
trimmed by greenback appreciation after a sharp fall in jobless
"The problem for the Canadian (dollar) ... has been the fact
that at the same time, we saw a much better than expected
jobless claims number out of the U.S," said Jeremy Stretch, head
of foreign exchange strategy at CIBC World Markets.
The currency firmed to C$1.0060 to the greenback, or 99.40
U.S. cents, after Statistics Canada said growing exports led to
a C$24 billion surplus in March.
It closed at C$1.0081, or 99.20 U.S. cents on Wednesday.
But the greenback also gained, pushing the loonie back to
around C$1.0071, or 99.30 U.S cents, as fewer Americans filed
new claims for unemployment benefits than at any time in the
last five years.
The North American currencies both gained versus the euro
after the European Central Bank cut interest rates
for the first time in 10 months, driven to act by an economy
wallowing in recession and freed to do so by sharply falling
Stretch said that if U.S. non-farm payrolls data due out on
Friday followed the jobless claims data with a positive
surprise, the loonie could bounce as much as a cent higher, but
would struggle to weaken much beyond C$1.02 this week.
Prices for Canadian government debt were mixed, with the
two-year bond off half a Canadian cent to yield 0.918
percent and the benchmark 10-year bond rising 5
Canadian cents to yield 1.679 percent.