Canada’s dollar gained to the strongest level in more than a week after government data showed U.S. and Canadian payrolls climbed more than forecast in September, fueling appetite for higher-yielding assets. The Canadian currency rose against 12 of its 16 most-traded counterparts as the data showed the nation’s jobless rate fell to the lowest since December 2008. The loonie, as Canada’s currency is nicknamed, extended its advance after U.S. job gains were also revised up for the previous two months. “The data out of Canada is better than expected, and the macro community will like that and be interested to buy the Canadian dollar at these levels,” said Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London. “Fair value for Canada is stronger than current levels. On a short- term basis, I would be a very gentle buyer of the Canadian dollar at these levels.” The Canadian currency rose 0.8 percent to C$1.0291 per U.S. dollar at 9:13 a.m. in Toronto, from C$1.0371 yesterday. It touched C$1.0235, the strongest level since Sept. 28. One Canadian dollar buys 97.17 U.S. cents. The loonie has gained for four consecutive days and was headed for its first weekly gain in three weeks. It touched C$1.0658 on Oct. 4, the weakest level since August 2010. Canadian employment rose by 60,900 in September after a decline of 5,500 in August, Statistics Canada said today in Ottawa. The unemployment rate fell to 7.1 percent. Economists in Bloomberg News surveys projected a gain of 15,000 jobs and unemployment to remain at August’s reading of 7.3 percent. U.S. Job Gains U.S. payrolls climbed by 103,000 workers, Labor Department data showed today in Washington. The median forecast in a Bloomberg survey called for an increase of 60,000. Revisions to previous reports added a total of 99,000 jobs to payrolls in July and August. The August total was revised to a gain of 57,000 from no change. “This report drives a wedge between what’s happening in Europe and what’s happening in the U.S.,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. in New York. “When push comes to shove, you’re seeing job creation in the U.S. rather than businesses sitting and watching the crisis unfold in Europe.” The U.S. currency fell versus 15 of its 16 most-traded peers as investors sought higher-risk assets. Bonds Fall Canada’s government bonds dropped, pushing the yield on the two-year benchmark note up seven basis points, or 0.07 percentage point, to 1 percent. It touched 1.03 percent, the highest level since Sept. 19. The 1.5 percent securities maturing in November 2013 declined 14 cents to C$101.01. Growth in the world’s 10th largest economy is expected by analysts to decelerate this year and in 2012, and Bank of Canada Governor Mark Carney has said there’s less need to lift borrowing costs. The central bank kept its main interest rate unchanged for an eighth meeting last month amid Europe’s financial crisis and a slow U.S. rebound. Economic growth is forecast to slow to 2.2 percent this year and 2.1 percent in 2012, according to a Bloomberg survey of economists and analysts this month. That’s 0.2 percentage points below the August forecast for both years. The Bank of Canada estimates economic growth will slow to 2.6 percent next year from 2.8 percent this year. The nation’s gross domestic product rose 0.3 percent in July to C$1.26 trillion ($1.21 trillion) on a seasonally adjusted basis, Statistics Canada said Sept. 30, matching the median estimate in a Bloomberg survey with 23 responses. ‘Good News’ “We’ve now had a reasonable GDP print and a reasonably good Canadian employment number, so that is good news for people looking at the fundamental story for Canada,” said Camilla Sutton, head of currency strategy at Bank of Nova Scotia in Toronto. Canada’s currency reached a three-year high of 94.07 cents on July 29 before plunging along with other risk-related assets as investors, concerned that a potential Greek default may spark a run on European banks and send the global economy into another recession, took refuge in the U.S. dollar and the yen. To contact the reporters for this story: Allison Bennett in New York at abennett23@bloomberg.net; Chris Fournier in Halifax, Nova Scotia at cfournier3@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

Source