The Canadian dollar strengthened against its US counterpart on Friday, recovering from an earlier loss after a decline in July employment numbers, as the increase in wages firmed investors' belief in a strong Canadian economy.
Wages for permanent employees rose by 4.5% year-over-year, the largest gain seen since January 2009, domestic data showed.
"I think there was a bit of a second read as well on the employment data, first of all the headline number was weak, but the wages component was relatively firm so I think the part of it (firming of the loonie) was from that," said Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital Markets.
At 3:35 pm EDT (1935 GMT), the Canadian dollar was trading 0.2% higher at 1.3198 to the greenback, or 75.77 US cents. The currency, despite having a volatile week, was nearly unchanged from the last Friday. For the year, the loonie is up 3.2%, making it the second-best performing G10 currency against the US dollar.
Canadian government bond prices were lower across the yield curve, with the two-year down 4.5 Canadian cents to yield 1.4% and the 10-year falling 26 Canadian cents to yield 1.3%.
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