October 11, 2019 / 1:36 PM / 5 days ago

CANADA FX DEBT-C$ notches 1-month high as jobs gain cements steady rate outlook

    * Canadian dollar rises 0.6% against the greenback
    * Canada adds 53,700 jobs in September
    * Price of U.S. oil increases 1.2%
    * Canadian bond prices fall across the yield curve

    TORONTO, Oct 11 (Reuters) - The Canadian dollar strengthened
to a four-week high against its U.S. counterpart on Friday after
domestic data showing a much bigger-than-expected jobs gain in
September supported bets for the Bank of Canada to keep interest
rates on hold this month.    
    The Canadian economy added 53,700 jobs in September, the
second straight month of robust jobs gains, Statistics Canada
data showed. Analysts had forecast a gain of 10,000
jobs            
    Chances of a Bank of Canada interest rate cut at the October
30 policy decision dipped to 7% from 9% before the data, the
overnight index swaps market indicated.           
    The central bank has kept its benchmark rate on hold at
1.75% this year even as other central banks, including the
Federal Reserve and the European Central Bank, have eased.
    At 9:03 a.m. (1303 GMT), the Canadian dollar          was
trading 0.6% higher at 1.3218 to the greenback, or 75.65 U.S.
cents. The currency touched its strongest intraday level since
Sept. 12 at 1.3206.
    Rising investor hopes for a partial trade deal between the
United States and China, as top negotiators from the two
countries geared up to meet for a second day of talks, added to
support for the loonie.
    Canada is a major exporter of commodities, including oil, so
its economy could benefit from reduced trade uncertainty.
    Oil prices climbed after Iranian media said a state-owned
oil tanker had been struck by missiles in the Red Sea near Saudi
Arabia, but bearish oil demand forecasts soon pulled crude off
session highs. U.S. crude oil futures        were up 1.20% at
$54.19 a barrel.
    Canadian government bond prices fell across the yield curve,
with the two-year            price down 15 Canadian cents to
yield 1.63% and the 10-year             falling 75 Canadian
cents to yield 1.492%.
    Canada's 2-year yield climbed 3.2 basis points further above
its U.S. equivalent to a spread of 4.5 basis points, the biggest
gap in favor of the Canadian bond since October 2017.

    
 (Reporting by Fergal Smith
Editing by Nick Zieminski)
  
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