CANADA FX DEBT-Canadian dollar climbs to 3-year high after robust jobs gain | Reuters
The Canadian dollar rose
against all the other G10 currencies on Friday and Canada's bond
yields jumped, after a bigger-than-expected domestic jobs gain
supported the view that the Bank of Canada would reduce
quantitative easing purchases next month.
Canada added 259,000 jobs in February, beating estimates of
a 75,000 increase, driven by the reopening of businesses as
COVID-19 lockdowns put in place in December and January were
eased, data from Statistics Canada showed.
"There remains a long way to go before the employment
backdrop returns to its pre-pandemic state," said Ryan Brecht, a
senior economist at Action Economics. "That being said, another
firm jobs report for March would likely boost market
expectations of a taper as soon as the April announcement."
The central bank is buying C$4 billion of bonds per week to
support the economy. On Wednesday, it signaled it would reduce
the pace of purchases as it continues to gain confidence in the
strength of the recovery.
The Canadian dollar was trading 0.5% higher at 1.2465
to the greenback, or 80.22 U.S. cents, the biggest gain among
G10 currencies. It touched its strongest since February 2018 at
1.2461, while it was up 1.5% for the week.
The safe-haven U.S. dollar rose following a fresh
spike in Treasury yields as the prospect of economies emerging
from year-long coronavirus lockdowns reignited inflation fears.
The price of oil, one of Canada's major exports,
consolidated its recent gains. U.S. crude futures settled
0.6% lower at $65.61 a barrel.
Canadian government bond yields were higher across a steeper
curve. The 10-year touched its highest since January
last year at 1.596% before dipping to 1.584%, up 14 basis points
on the day.
(Reporting by Fergal Smith
Editing by Nick Zieminski and Alistair Bell)