August 9, 2019 / 8:21 PM / 2 months ago

CANADA FX DEBT-Loonie strengthens on strong wage increase

 (Adds strategist quote and details throughout, updates prices)
    * Canadian dollar rises 0.2% against the greenback
    * Wages for permanent employees rose by 4.5% year-over-year
    * U.S. crude oil prices increase by 3.73%
    * Bond prices move lower across the yield curve

    By Levent Uslu
    TORONTO, Aug 9 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Friday, recovering from an
earlier loss after a decline in July employment numbers, as the
increase in wages firmed investors' belief in a strong Canadian
economy.
    Wages for permanent employees rose by 4.5% year-over-year,
the largest gain seen since January 2009, domestic data showed.
            
    "I think there was a bit of a second read as well on the
employment data, first of all the headline number was weak, but
the wages component was relatively firm so I think the part of
it (firming of the loonie) was from that," said Mark Chandler,
head of Canadian fixed income and currency strategy at RBC
Capital Markets.
    At 3:35 p.m. EDT (1935 GMT), the Canadian dollar         
was trading 0.2% higher at 1.3198 to the greenback, or 75.77
U.S. cents. The currency, despite having a volatile week, was
nearly unchanged from the last Friday.
    For the year, the loonie is up 3.2%, making it the
second-best performing G10 currency against the U.S. dollar.
    Canada's economy lost a net 24,200 jobs in July, after
shedding 2,200 in the previous month but grew by 1.9% from the
last year, also showed domestic data.             
    The rise of the loonie came as the price of oil, one of
Canada's major exports, increased on Friday, supported by a drop
in European inventories and OPEC output cuts despite the
International Energy Agency forecasting demand growth at its
lowest since the financial crisis of 2008.             
    U.S. crude oil futures        settled 3.7% higher at $54.50
a barrel.
    Canadian government bond prices were lower across the yield
curve, with the two-year            down 4.5 Canadian cents to
yield 1.4% and the 10-year             falling 26 Canadian cents
to yield 1.3%.

 (Reporting by Levent Uslu
Editing by Marguerita Choy)
  
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