TORONTO: The Canadian dollar strengthened against its US counterpart on Friday, clawing back some of this week’s decline, as stronger-than-expected domestic jobs data offered a sign the economy is adjusting to trade uncertainty.
The loonie was trading 0.3 percent higher at 1.4075 per US dollar, or 71.05 US cents, after six straight days of declines.
Canada’s economy added 66,600 jobs in October, which followed a 60,400 increase in September, and the unemployment rate fell to 6.9 percent from 7.1 percent. Analysts had forecast a jobs decline of 2,500.
“The Canadian economy again generated more jobs than anticipated last month, suggesting that the economy is beginning to shrug off the tariff shock,” Karl Schamotta, chief market strategist at Corpay, said in a note.
“The Canadian dollar is driving higher and yields are climbing, suggesting that traders see the Bank of Canada waiting for longer before delivering a last cut in its easing cycle - if it delivers one at all.”
Data on Wednesday showed that Canada’s services economy expanded in October for the first time in 11 months.
Investors see a roughly 90 percent chance the BoC leaves interest rates unchanged in December, up from 80 percent before the jobs data. Last week, the BoC signaled a possible end to its easing campaign after it lowered its benchmark rate to a three-year low of 2.25 percent.
The currency moved on Friday in a range of 1.4056 to 1.4126. For the week, it was down 0.5 percent, as investors weighed a recent hawkish tilt by the Federal Reserve.
On Tuesday, Prime Minister Mark Carney committed to invest about CD280 billion over five years in infrastructure as well as on measures to raise productivity and competitiveness in a budget that more than doubled this year’s fiscal shortfall.
Comments
Comments are closed for this article.