February 8, 2019 / 9:50 PM / 4 months ago

CANADA FX DEBT-C$ rallies on jobs gain but ends lower for the week

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar climbs 0.3 percent against the U.S. dollar
    * Canada adds 66,800 jobs in January
    * Price of U.S. oil falls 0.2 percent
    * For the week, the loonie ends down 1.3 percent
    * Canadian bond prices decline across much of the yield
curve

    By Fergal Smith
    TORONTO, Feb 8 (Reuters) - The Canadian dollar strengthened
against the greenback on Friday as stronger-than-expected
domestic jobs data helped the currency rebound from an earlier
two-week low, but the loonie still lost ground for the week due
to rising fears over global trade.
    Canada added 66,800 jobs in January, the second month of
outsized gains in the past three, as services-producing sector
jobs soared, Statistics Canada reported. Analysts had forecast a
gain of 8,000 positions.             
    Still, the Bank of Canada looks set to leave interest rates
unchanged over the coming months, money market data showed,
after having hiked by a total of 125 basis points since July
2017.               
    "For the Canadian dollar, we are up on the day but we have
given back most of the gains that we've gotten just in response
to the jobs data," said Eric Theoret, a currency strategist at
Scotiabank.
    "It is still very much a sentiment driven market and I think
right now there is a lot of concerns surrounding trade," Theoret
said.
    U.S. stocks ended near flat as skepticism over the United
States and China reaching a trade deal before a looming deadline
added to concerns over slowing global growth.             
    Worries about the global economy also weighed on the price
of oil, one of Canada's major exports. U.S. crude oil futures
       settled 0.2 percent lower at $52.72 a barrel.
            
    At 4:06 p.m. (2106 GMT), the Canadian dollar          was
trading 0.3 percent higher at 1.3264 to the greenback, or 75.39
U.S. cents. The currency's strongest level of the session was
1.3233, while it touched its weakest since Jan. 25 at 1.3329.
    For the week, the loonie fell 1.3 percent.        
    Separate data, from the Canadian Mortgage and Housing
Corporation, showed that Canadian housing starts fell less than
expected in January to 207,968 units from a revised 213,630
units in December.                     
    Canadian government bond prices were lower across much of
the yield curve, with the two-year            down 1 Canadian
cent to yield 1.772 percent and the 10-year             falling
5 Canadian cents to yield 1.883 percent.
    The gap between Canada's 10-year yield and its U.S.
equivalent narrowed by 2.6 basis points to a spread of 75.1
basis points in favor of the U.S. bond.

 (Reporting by Fergal Smith
Editing by Susan Thomas and Sandra Maler)
  
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