Canadian dollar dips as jobs gain seen not enough to accelerate rate hikes

The Canadian dollar slipped to a one-week low against its US counterpart on Friday as data showing a jump in domestic jobs was seen as not enough to trigger a faster pace of interest rate hikes by the Bank of Canada. The Canadian economy added 63,300 jobs in September, Statistics Canada data indicated. That was more than twice as many as analysts had forecast, although all the job gains were in part-time positions.
In separate data, Canada recorded its first trade surplus for more than 18 months in August as unusually timed shutdowns at auto plants helped cut imports at a greater rate than exports. "The headlines for both reports were much better than expected, but the details are less upbeat," said Ryan Brecht, a senior economist at Action Economics.
Due to the weaker details, there is no additional pressure on the Bank of Canada "to drop its commitment to gradualism" at the October 24 policy announcement, Brecht said. The central bank, which has raised interest rates four times since July 2017, said last month that it had discussed whether a gradual approach to tightening remained appropriate.
Chances of a hike in October were little changed at about 85 percent after the data, the overnight index swaps market indicated.
At 3:53 p.m. (1953 GMT), the Canadian dollar was trading 0.1 percent lower at 1.2945 to the greenback, or 77.25 US cents. The currency touched its weakest since September 28 at 1.2955.
Still, it outperformed the New Zealand dollar, which fell 0.6 percent and the Australian dollar, which was down 0.3 percent.
Declines for commodity-linked currencies came as data showing US wage growth helped push yields on longer-dated US bonds to multi-year peaks.
For the week, the loonie was down 0.3 percent as the US dollar broadly climbed.
On Monday, the Canadian dollar touched its strongest in more than four months at 1.2783 after a last-minute deal to salvage the trilateral North American Free Trade Agreement reduced uncertainty for Canada's economy.
US crude oil futures settled 1 cent higher at $74.34 a barrel. Oil is one of Canada's major exports.
Canadian government bond prices were lower across a steeper yield curve, with the 10-year falling 35 Canadian cents to yield 2.601 percent. The 10-year yield touched its highest since January 2014 at 2.615 percent.
Canada's bond market will be closed on Monday for the Thanksgiving Day holiday on Monday.