Reuters: US Dollar Report: CANADA FX DEBT-C$ weakens after U.S. ADP jobs data, Fed

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CANADA FX DEBT-C$ weakens after U.S. ADP jobs data, Fed Apr 4th 2012, 13:35 Wed Apr 4, 2012 9:35am EDT * C$ at C$0.9959 vs US$, or $1.0041 * U.S. ADP data, Fed outlook boost US$ * Bond prices higher across curve * Reuters poll sees C$ near parity for next year By Jon Cook TORONTO, April 4 (Reuters) - The Canadian dollar fell against its U.S. counterpart on Wednesday after data showed the U.S. private sector added more jobs than expected in March, reinforcing a more upbeat outlook for the U.S. economy which has strengthened the greenback against other major currencies. U.S. private employers added 209,000 jobs in March, suggesting the labor market is strengthening, a report by a payrolls processor showed on Wednesday. Job gains for January and February were also revised up to 182,000 and 230,000, respectively. The positive numbers reinforced the more upbeat tone seen in minutes released on Tuesday from the U.S. Federal Reserve's March policy meeting that suggested the appetite for another dose of stimulus via quantitative easing, so-called QE3, has eased as the U.S. economic recovery gains momentum. The improving American economy has helped boost the Canadian currency this year, particularly as event risks in Europe have subsided. But on Wednesday the greenback was firming against all other major currencies. "The Canadian dollar is actually depreciating less than many other currencies compared to the U.S. dollar," said Charles St-Arnaud, Canadian economist and currency strategist at Nomura Securities International in New York. Canada's dollar outperformed the euro, Swiss franc and Australian and New Zealand dollars. At 9:20 a.m. (1320 GMT), the Canadian dollar was at C$0.9959 versus the U.S. currency, or $1.0041, down from Tuesday's close at C$0.9904 against the U.S. dollar, or $1.0097. The sharp move higher by the U.S. currency hurt commodities, which are priced in U.S. dollars. U.S. crude futures lost $1.16 cents to $102.85, after falling by more than $1 in the previous session. Gold prices fell more than 1 percent. The Canadian dollar has gained more than 2 percent this year against the U.S. currency. A Reuters poll released on Wednesday showed the Canadian dollar at exactly $1.00 in one, three and six months from now. In a year, the currency is expected to strengthen slightly to C$0.988 versus the U.S. dollar. "The Canadian economy should mildly outpace the recovery in the U.S., which would keep the Canadian dollar stronger than the U.S. (dollar)," said David Bradley, a director of foreign exchange trading at Scotia Capital. Canadian government bond prices were higher across the curve, mimicking the rise in U.S. Treasuries that followed the employment data and Fed minutes. Canada's 2-year bond was up 6 Canadian cents to yield 1.231 percent, while the 10-year bond rose 58 Canadian cents to yield 2.131 percent. Link this Share this Digg this Email Reprints

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