The Canadian dollar shot higher against the US currency on Friday, as US equities bounced and investors took profits from a recent rally in the greenback following fairly positive US jobs data. US payrolls unexpectedly fell in January, but the unemployment rate surprisingly dropped to a five-month low, hinting at labour market improvement.
It was good news for Canada, too, with the economy adding a surprising 43,000 jobs in January, while the unemployment rate fell to 8.3 percent from 8.4 percent, according to Statistics Canada data on Friday. The Canadian dollar initially turned slightly lower after the US data was released, a knee-jerk reaction to the weak headline number.
"When they started to look at the improved unemployment print and dig into the revisions that's when we started to see things reverse a little bit." said George Davis, chief technical strategist for RBC Capital Markets. "The main trigger point was we started to see equity markets bounce off of their lows so that kind of helped the Canadian dollar given the positive correlation between the two."
The Canadian dollar jumped to C$1.0690 to the US dollar or 93.55 US cents, from C$1.0749, or 93.03 US cents just before the Canadian jobs report. On Thursday, the Canadian currency closed at C$1.0727, or 93.22 US cents. It touched a three-month low of C$1.0781 in the overnight session. As investors regained some risk appetite, Canadian government bond prices turned lower across the curve following the US jobs data.
Comments
Comments are closed.