By Commodity News Service Canada
Winnipeg – December 7/12 – CNS -The Canadian dollar was trading at a firmer level versus the US currency in late North American activity on Friday. Much of the upswing in the value of the Canadian dollar was linked to supportive economic news in both Canada and the US Friday morning, market watchers said.
The Canadian currency late in the afternoon was quoted at
C$0.9903 (100.99 US cents). This compares with Thursday’s late North American quote of C$0.9913 (100.87 US cents).
Canada added 59,300 new jobs in November, pushing the unemployment rate down to 7.2%, according to Statistics Canada. Market economists had expected Canada to add 10,000 new jobs in the month, while leaving its jobless rate unchanged at 7.4%, according to RBC Capital Markets.
The US also had positive job data. Nonfarm payrolls advanced by 146,000 in November, while the unemployment rate fell to 7.7%, the lowest rate since December 2008. Economists had been anticipating the US would add 80,000 new jobs, while the unemployment rate would remain unchanged at 7.9%.
The upside in the Canadian dollar was tempered by the sell-off seen in global crude oil as well as by the taking of profits late in the session, brokers said.
Concerns about the US Government’s ability to handle its ‘fiscal cliff’ situation also restricted the upside in the Canadian currency.
Canadian bonds were lower along the yield curve on Friday reflecting the better-than-expected labor figures in the US and Canada, market watchers said.
Canada’s two-year bond yield was at 1.070% Friday, compared with 1.042% late Thursday. The 10-year bond yields 1.713%, from 1.694%. Bond yields move inversely to bond prices.
While Canada’s fixed-income market broadly declined over the job figures, the back end of the curve still outperformed the rest of the maturity stack as concerns continue to linger that the labour market hasn’t returned to full capacity, analysts said.