January 6, 2017 / 2:29 PM / 8 months ago

CANADA FX DEBT-C$ firms after unexpectedly strong Canadian jobs, trade data

* Canadian dollar at C$1.3208 or 75.71 U.S. cents
    * Bond prices mostly lower across the maturity curve

    By Solarina Ho
    TORONTO, Jan 6 (Reuters) - The Canadian dollar touched its
strongest level against the U.S. dollar in more than three weeks
on Friday following surprisingly strong employment and trade
data.
    Canada's economy unexpectedly added 53,700 jobs in December,
all of them full-time positions, and the unemployment rate edged
higher, according to government data. It also posted a trade
surplus of C$526 million, its first since September 2014, as
exports jumped and imports posted a modest gain. Economists, on
average, were expecting declines for both
data.  
    "There's a big response in the Canadian dollar," said Jimmy
Jean, economic strategist at Desjardins. "We tend to take things
with a bit of grain of salt and look at the broader trends. But
there's no question if we take everything at face value this is
an extremely strong number."
    At 9:17 a.m. ET (1417 GMT), the Canadian dollar was
trading at C$1.3208 to the greenback, or 75.71 U.S. cents,
stronger than the Bank of Canada's official close of C$1.3242,
or 75.52 U.S. cents.
    The Canadian dollar, which was outperforming most of its key
currency counterparts, touched its strongest level since Dec.
14, at C$1.3179. Its weakest level of the session was C$1.3268.
    The U.S. dollar also strengthened following U.S. jobs data
that showed slower job growth, but an increase in wages, setting
the economy up for further interest rate increases from the
Federal Reserve. 
    Canadian government bond prices were mostly lower across the
maturity curve, with the two-year price down 8.5
Canadian cents to yield 0.768 percent and the benchmark 10-year
 falling 46 Canadian cents to yield 1.716 percent.
    The Canada-U.S. two-year bond spread was -43.8 basis points,
while the 10-year spread was -68.6 basis points.

 (Reporting by Solarina Ho; Editing by Nick Zieminski)

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