TORONTO: The Canadian dollar weakened against its US counterpart on Friday but held on to much of this week’s gains as a bigger-than-expected domestic jobs increase supported the view that the Bank of Canada is not in a rush to cut interest rates.
The loonie was trading 0.2% lower at 1.3480 per US dollar, or 74.18 US cents, after earlier touching its strongest level since Feb. 9 at 1.3421. For the week, it was up 0.6%.
Gains this week came as the US dollar lost ground against a basket of major currencies.
“The market is latching back in again on (Federal Reserve) rate-cut signals,” said Amo Sahota, director at Klarity FX in San Francisco. “Generally, the market feels you can put money back into risk assets.”
On Thursday, Fed Chair Jerome Powell said the US central bank was “not far” from gaining the confidence it needs in falling inflation to begin cutting interest rates.
That was a “green light” on rate cuts, as compared to an “amber light” from the Bank of Canada, Sahota said.
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