Canadian dollar hits multi-month lows

The Canadian dollar fell to fresh 14-1/2 month lows against the US currency on Friday, falling initially on US jobs data and extending its decline despite recovering oil prices.
Domestic bond prices followed the lead of stronger US treasuries, as US jobs revisions bolstered the view that the US Federal Reserve would not cut interest rates.
The Canadian dollar finished at C$1.1855 to the US dollar or 84.35 US cents, down from C$1.1788, or 84.83 US cents, at Thursday's close. Crude oil prices hit their highest levels in a month, but traders did not take it as a cue to buy the commodity-linked currency, instead focusing on other factors such as US jobs strength and base metals prices that have weakened in recent weeks.
"The market's more comfortable at the moment with these weak levels for the Canadian dollar, and even willing to push it lower," said Matthew Strauss, currency strategist at RBC Capital Markets.
The United States added a weaker-than-expected 111,000 new jobs in January, but jobs growth for November and December were revised sharply upwards, giving the greenback a boost against all comers and pressuring the Canadian dollar.
Negative sentiment associated with Great-West Lifeco's $3.9 billion offer for Putnam Investments also was cited as weighing on the Canadian dollar, while a media report that the European Central bank may raise rates just one more time spiked the greenback sharply higher, and pushed the Canadian dollar through its recent lows.
The C$ dropped as far as C$1.1872, or 84.23 US cents - pushing past levels that have been strong downside support in recent weeks - although it quickly rebounded.
"The C$1.1850 level is key. Today, it's more of a US dollar story with the rates and the solid payrolls," said Ted Gould, trader at Investors Bank & Trust in Boston.
The two-year bond inched ahead 2 Canadians cent to C$100.23 to yield 4.118 percent, while the 10-year bond rose 13 Canadian cents to C$98.61 to yield 4.182 percent. The yield spread between the two-year and 10-year bond moved to 6.4 basis points from 6.9 at the previous close.