Jobs data helps the Canadian dollar trim the weekly decline

TORONTO (Reuters) – The Canadian dollar rose against its U.S. counterpart on Friday, as stronger-than-expected local jobs data kept alive the prospect of the Bank of Canada raising interest rates again after the central bank moved on the sidelines earlier this month. the week.

The Canadian dollar was trading up 0.4% at 1.3625 per dollar, or 73.39 US cents, after moving in a range of 1.3609 to 1.3689.

However, it is down 0.2% this week, a day after touching a five-month low of 1.3694.

The Canadian economy added 39,900 jobs in August, more than double estimates for an increase of 15,000 jobs, and the unemployment rate remained at 5.5%, a sign of underlying economic strength despite higher interest rates.

Money markets see a 44% chance of another rate hike from the BoC by the end of the year, up from 36% before the data. On Wednesday, the central bank kept its benchmark interest rate unchanged at a 22-year high of 5% after rising in June and July, signaling that the economy has entered a period of weaker growth.

Doug Porter, chief economist at BMO Capital Markets, said in a note that the jobs data is “not strong enough to prompt an immediate rethink of the pause, but certainly not weak enough to rule out further upsides.”

Adding to the support for the Canadian dollar, US crude oil futures rose almost 1% to $87.72 per barrel as investors chose to focus on tight supply despite widespread macroeconomic uncertainty, while the US dollar (.DXY) fell against a basket Of the major currencies.

The Canadian yield for two years increased by 5.9 basis points to 4.669%, while the gap between it and its US equivalent narrowed by 3.6 basis points to 30.9 basis points in favor of the American paper.

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