The Canadian dollar touched its strongest level against the U.S. dollar in more than three weeks on Friday following surprisingly strong employment and trade data.
Canada’s economy unexpectedly added 53,700 jobs in December, all of them full-time positions, and the unemployment rate edged higher, according to government data. It also posted a trade surplus of C$526 million, its first since September 2014, as exports jumped and imports posted a modest gain. Economists, on average, were expecting declines for both data. “There’s a big response in the Canadian dollar,” said Jimmy Jean, economic strategist at Desjardins. “We tend to take things with a bit of grain of salt and look at the broader trends. But there’s no question if we take everything at face value this is an extremely strong number.”
At 9:17 a.m. ET (1417 GMT), the Canadian dollar was trading at C$1.3208 to the greenback, or 75.71 U.S. cents, stronger than the Bank of Canada’s official close of C$1.3242, or 75.52 U.S. cents.
The Canadian dollar, which was outperforming most of its key currency counterparts, touched its strongest level since Dec. 14, at C$1.3179. Its weakest level of the session was C$1.3268.
The U.S. dollar also strengthened following U.S. jobs data that showed slower job growth, but an increase in wages, setting the economy up for further interest rate increases from the Federal Reserve. Canadian government bond prices were mostly lower across the maturity curve, with the two-year price down 8.5 Canadian cents to yield 0.768 percent and the benchmark 10-year falling 46 Canadian cents to yield 1.716 percent.
The Canada-U.S. two-year bond spread was -43.8 basis points, while the 10-year spread was -68.6 basis points.
via Kitco
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.