Canada dollar outperforms most of its major peers

Canada's dollar strengthened against most of its major peers after the central bank said conditions in the domestic economy and European debt markets are improving and US employers added more jobs than forecast. The currency touched the strongest in almost two months versus the euro last week on speculation the Bank of Canada is less likely to reduce interest rates than its European counterpart. The Canadian dollar rose against the majority of it most-traded counterparts before Bank of Canada Senior Deputy Governor Tiff Macklem is due to speak in Sao Paulo tomorrow. "Expectations for rate cuts in Canada have been pared back," said Brian Kim, a currency strategist in Stamford, Connecticut, at Royal Bank of Scotland Group. "Another strong labour report in the US points to continued relative economic outperformance versus other developed areas. The Canadian dollar should benefit." The loonie, nicknamed for the image of the aquatic bird on the C$1 coin, rose 0.4 per cent on the week to C$1.2996 against the euro on Friday in Toronto, the highest since January 18. It fell 0.1 per cent to 99.05 cents per US dollar. One Canadian dollar purchases $1.00096 (Dh3.67.) The loonie strengthened 0.9 per cent over the past week, the second-best performer after the greenback's one per cent gain, according to Bloomberg Correlation-Weighted Currency Indexes, a gauge of ten developed-nation currencies. The euro gained 0.4 per cent. Canada's currency touched 98.73 cents Friday versus the greenback, the most since it reached 98.42 cents on March 1, the strongest since September. Longer-term government bonds fell, pushing the yield on the benchmark ten-year note higher by six basis points, or 0.06 percentage point, to 2.02 per cent. The yield reached 1.837 per cent in December, a record low. Yields on Canada's two-year note gained six basis points to 1.17 per cent, the highest since August, as traders speculated the central bank was moving closer to raising rates. The loonie rose on Friday after the US reported nonfarm payrolls increased by 227,000 in February after jumping by a revised 284,000 the prior month, data from the Labour Department showed yesterday. The US unemployment rate held at a three-year low of 8.3 per cent. Economists had predicted gains of 210,000 and a steady jobless rate. "Buy North America," said Shaun Osborne, Toronto-based chief currency strategist at Toronto-Dominion Bank's TD Securities unit. "Better US numbers are better for the Canadian dollar." Canadian employment declined by 2,800 after a January increase of 2,300, Statistics Canada said Friday in Ottawa. Canadian dollar fell per US unit