Canadian dollar rises

The Canadian dollar climbed versus the US dollar on Friday after US data showed a massive job loss in February but one that wasnt as bad as some in the market had feared. The US economy shed 651,000 jobs in February, pushing the unemployment rate to its highest level in 25 years as companies buckled under the strain of recession.
The figure was near the consensus expectation of a 648,000 drop in non-farm payrolls of economists polled by Reuters, but some had forecast losses as high as 800,000. The Canadian dollar was in a basket of currencies rising against the greenback on Friday. The US dollar has lately been favoured as a safe haven in the face of global economic woes.
The Canadian dollar rose to C$1.2792 to the US dollar or 78.17 US cents, up from Thursdays close at C$1.2884 or 77.62 US cents. "The initial knee-jerk reaction was to drive the Canadian dollar stronger as the first read on the US employment report was that it wasnt quite as bad as the worst expectations," said Doug Porter, deputy chief economist, BMO Capital Markets.
"The main message is the markets worst fears for this report werent quite realised so weve seen the Canadian dollar strengthen a bit on that and bonds come off their highs," he said. Rising oil prices also supported the Canadian currency. Oil is a key Canadian export and often sets direction for the currency.
After the data, the currency moved as high as C$1.2765 to the US dollar, or 78.34 US cents, then pared gains. A slightly better tone to stock markets also reflected a loosening of risk aversions grip. Canadian bond prices turned lower after the US data as market players prepared for an opening bounce on North American stocks, which had hit multiyear lows this week.
The Toronto Stock Exchange and major US stock markets rose more than 1 percent in early action, supported by strength in commodity prices. The attractiveness of safe government debt is curbed when stock markets rise.
The two-year bond fell 7 Canadian cents to C$103.06 to yield 0.963 percent. The 10-year bond lost 22 Canadian cents to C$107.09 to yield 2.942 percent. The 30-year bond dropped 45 Canadian cents to C$124.90 and yielded 3.589 percent.