Canada's currency rose slightly against the greenback on Thursday, boosted by stronger equities, but investors largely avoided big bets ahead of key domestic and US jobs data that will give a glimpse into the health of the two economies.
If the reports out Friday show more jobs were shed than expected, traders could unload the Canadian dollar and flock to the US dollar given its status as a safe haven play. But a strong reading could boost the Canadian currency. "It's just a matter of traders just kind of sitting on their hands waiting on the numbers for tomorrow," said Brendan McGrath, senior FX trader at Custom House, a currency services firm in British Columbia. "But we should see the US dollar catch a bid tomorrow if the US and Canadian employment data is worse than expected."
According to McGrath, negative surprises in the data could knock the Canadian dollar back down toward the two-week low of C$1.1103 that it hit Wednesday. And he said a significant break above C$1.11 would put the next resistance level for the dollar around C$1.13.
The C$ closed at C$1.1033 to the US dollar, or 90.64 US cents, up from C$1.1048 to the US dollar, or 90.51 US cents, at Wednesday's close. The currency received support from equity markets. The S&P/TSX composite index ended up 2.06 percent at 10,921.49, while the Dow Jones industrial average rose 0.69 percent to 9,344.61.