5:24pm EST
* C$ ends at 97.04 U.S. cents, up 2 U.S. cents on the week
* Bonds fall across the curve
* U.S. payrolls data buoy job creation hopes
By Ka Yan Ng
TORONTO, March 5 (Reuters) - The Canadian dollar faded from
six-week highs on Friday but finished a whisper stronger on
rising oil prices and a flow out of the safe-haven greenback
after better-than-expected U.S. jobs data.
The payroll report, which showed fewer-than-expected jobs
lost in the United States during last month's snowstorms,
offered more evidence of economic recovery, and bolstered
market confidence in taking risks with moves out of
U.S.-denominated investments. [ID:nN04107795]
"The market is seeing the report in a fairly favorable
light. Trying to adjust for the snowstorm effect, it's possible
payrolls rose in February," said Sal Guatieri, senior economist
at BMO Capital Markets. "It's increased risk appetite in the
sense that (if) Americans have jobs, they'll start buying
Canadian-made products."
The Canadian dollar, which also benefited from rising oil,
one of the country's key exports, finished at C$1.0305 to the
U.S. dollar, or 97.04 U.S. cents, up from Thursday's close at
C$1.0306 to the U.S. dollar, or 97.03 U.S. cents.
For the week, the currency gained 2 U.S. cents on a
combination of strong economic data and firming prices for
Canadian commodities.
Earlier in the week, the currency surged in anticipation
that Canadian interest rates would rise in the second half.
That impression was fueled by stronger-than-expected Canadian
GDP data on Monday and a Bank of Canada statement on Tuesday
that sounded slightly more hawkish on rates.
"The volatility has declined a little bit," said Rob
Wittmann, chief executive at Knightsbridge Foreign Exchange, a
commercial foreign exchange dealing firm. "A good portion of
the news is priced in at the current levels."
Earlier Friday it rose to a six-week high of C$1.0263 to
the U.S. dollar, or 97.44 U.S. cents, the fifth time this week
it has approached the stronger end of its trading range.
The currency has traded roughly between C$1.02 and C$1.0750
since last October, with strong moves to either side but
without much follow-through. A break above C$1.02 could set up
for a run to parity against the U.S. dollar.
BONDS MIMIC TREASURIES LOWER
Canadian bonds fell across the curve, mimicking moves in
U.S. Treasuries, after the U.S. jobs data firmed expectations
of recovery.
Guatieri said it was clear that the U.S. labor market was
healing and he expects Canadian jobs figures for February, due
next Friday, would show a similar trend. That would put the
Bank of Canada on track to raise interest rates in the second
half of the year.
The median forecast of 21 analysts is for a net gain of
20,000 jobs in February, considerably less than the 43,000 job
gains in January. However, it would reinforce views that
Canada's economy is recovering faster than forecast.
[ID:nN05244644]
The two-year Canadian government bond <CA2YT=RR> fell 7
Canadian cents to C$99.97 to yield 1.518 percent, while the
10-year bond <CA10YT=RR> was down 38 Canadian cents at C$102.23
to yield 3.465 percent.
Canadian bonds outperformed their U.S. counterparts across
the curve, except in the two-year maturity. The difference
between 10-year yields widened 2.2 basis points to 20.9 basis
points on Frid
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