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Canada dollar ends up after soft US jobs data

TORONTO: The Canadian dollar ended significantly higher on Friday after soft US jobs data helped it by soothing concerns about the extent of any US interest-rate tightening in the coming months.

"The big news came out with the nonfarm (payrolls data) -- obviously a much weaker number than we thought. That set the stage for a US dollar weakening," said Diego Giurleo, managing director of global markets at Royal Bank of Canada in New York.

The Canadian dollar closed at C$1.4503 (68.95 US cents) on Friday after closing at C$1.4557 (68.70 US cents) in the previous session.

News that US nonfarm payrolls grew by just 43,000 jobs in February, considerably fewer than the 206,000 forecast, nudged the Canadian dollar up from the C$1.4539 level to the C$1.4505 area by mid-morning. It slipped lower occasionally through the balance of trading, but managed to recapture the lost territory and end near session highs.

Average hourly wage gains in the US were also subdued, rising by only 0.3 percent.

Giurleo said that while non-European currencies enjoyed some follow-through after the US news, the euro didn't. It faltered against the US dollar enabling the Canadian dollar to make further gains, he said.

A dynamic recent performance by the Toronto Stock Exchange has also afforded some support to the Canadian dollar in recent sessions, Giurleo said.

While the TSE 300 Composite Index slipped to a losing position at the end of Friday session, it hit a new intraday high at 9,573.1 earlier in the day.

"Canada's still showing some momentum, and more importantly, the TSE seems to be bubbling," Giurleo said.

Overall, trading in the currency was fairly subdued on Friday, he added. "There's been nothing extraordinary about today. If you look at the range, it's fairly narrow," he said.

There are still negatives for the Canadian unit, including pressures from bond maturities, but Friday's economic news from the US enabled it to temporarily surmount them, he said.

"News like this will keep the people who are trying to ride short Canada positions to take some profit, so that's what you're seeing out there," he said.

In cross-trading against major currencies, the Canadian dollar was at 74.32 yen and at C$1.3897 against the euro. The Canadian dollar was at A$1.3318 against the Australian dollar.-Reuters