The Canadian dollar strengthened against its US counterpart on Friday after domestic data showing a record increase in jobs caught the foreign exchange market by surprise, pressuring investors who had been short the loonie. The Canadian economy added 94,100 jobs in November on higher full-time hiring, and the unemployment rate dipped to a new all-time low of 5.6 percent, Statistics Canada said. Economists had forecast a jobs gain of 11,000.
At 4:00 p.m. (2100 GMT), the Canadian dollar was trading 0.5 percent higher at 1.3312 to the greenback, or 75.12 US cents. The currency traded in a range of 1.3285 to 1.3400. For the week, the loonie was down 0.2 percent. It hit its lowest in nearly 18 months on Thursday at 1.3445, following an interest rate decision the day before by the Bank of Canada. The central bank, which has hiked five times since July 2017, left its benchmark rate on hold at 1.75 percent and dampened expectations for additional hikes.
Canadian government bond prices were mixed across a flatter yield curve, with the two-year down 2 Canadian cents to yield 2.002 percent and the 10-year rising 18 Canadian cents to yield 2.071 percent. The gap between Canada's two-year yield and its US equivalent narrowed by 5 basis points to a spread of 71.7 basis points in favor of the US bond.
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