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Canadian dollar rises 0.2% against the greenback
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Touches its weakest level since Oct. 21 at 1.3817
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Price of U.S. oil rises 0.9%
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Canadian bond yields ease across curve
TORONTO, March 9 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Thursday, recovering from nearly a five-month low, as U.S. data tempered fears that a tight labor market might trigger an even more aggressive tightening campaign by the Federal Reserve. Wall Street shares rose and the U.S. dollar gave back some recent gains against a basket of major currencies as the number of Americans filing new claims for unemployment benefits increased more than expected last week. Markets have been on edge in recent days as Fed Chair Jerome Powell delivered a message of higher and potentially faster rate hikes. In contrast, the Bank of Canada on Wednesday left its benchmark interest rate on hold at 4.50%, becoming the first major central bank to suspend its tightening campaign. Investors are betting that the sensitivity of Canada's economy to higher borrowing costs will result in a historically large gap between the tightening campaigns of the BoC and the Fed. Canadian and U.S. employment data, due on Friday, could offer additional clues on the policy outlook. Economists expect Canada's economy to add 10,000 jobs in February after a blockbuster gain in the previous month. The Canadian dollar was trading 0.2% higher at 1.3775 to the greenback, or 72.60 U.S. cents, after touching its weakest intraday level since Oct. 21 at 1.3817. The price of oil, one of Canada's major exports, steadied after a two-day decline as strike-disrupted fuel supply in France, a drop in U.S. crude inventories and a weaker U.S. dollar offset fears over the economic impact of rising interest rates. U.S. crude prices were up 0.9% at $77.37 a barrel. Canadian government bond yields were lower across the curve. The 2-year eased 3.1 basis points to 4.274% after touching on Wednesday its highest level since October 2007 at 4.370%. (Reporting by Fergal Smith; Editing by Paul Simao)
