The Canadian dollar touched a two-month low against its US counterpart on Friday after data showed robust US jobs growth in October ddespite a government shutdown The US report fanned expectations the Federal Reserve could move sooner to scale back its monetary stimulus. Canadian employment figures, meanwhile, came in close to expectations.
Canada's economy added 13,200 jobs in October, while US employers added 204,000 jobs to their payrolls. "The good (US) jobs numbers were a surprise to the topside and piggy-backs on the better-than-expected GDP data that we saw yesterday," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. The jobs data "really fuels expectations that the government shutdown didn't really impact the US economy and hence ... possibly having a December taper on the table," he said.
The US economy grew at its fastest pace in a year in the third quarter, data showed on Thursday. The US payroll data had a broad impact on financial markets, boosting the greenback against a range of currencies and pushing stocks higher and bonds lower. "The US number at the margin kept the taper discussion alive," said Royal Bank of Canada chief economist Craig Wright.
The Canadian dollar ended the North American session at C$1.0478 to the greenback, or 95.44 US cents, compared with Thursday's close of C$1.0461, or 95.59 cents. It had slipped to C$1.0504 at one point, its weakest level since September 6. The move meant it lost 0.5 percent for the week. The loonie, as Canada's currency is colloquially known, gained against the euro. This followed strong gains against the euro on Thursday, when the European Central Bank surprisingly cut rates to a record low.
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