Canadian dollar hits one-month high

06 Apr, 2014

The Canadian dollar firmed against the greenback on Friday to its strongest in nearly a month, bolstered by data showing the domestic economy added twice as many jobs as expected in March. Employers created 42,900 jobs last month, well ahead of the 20,000 that analysts had expected, while the unemployment rate declined for the first time this year, to 6.9 percent. The gain comes on the heels of a loss of 7,000 jobs in February.
"This is really positive for the loonie, it gives people a sense of confidence that was almost non-existent two or three weeks ago," said Rahim Madhavji, president at KnightsbridgeFX.com in Toronto. At the same time, separate data south of the border showed US employers kept up a steady pace of hiring last month with 192,000 new jobs. Still, the figure was slightly below expectations and the divergence between the US and Canadian numbers helped further support the loonie.
"The combination of an as-expected US report and a solid Canadian number has given the Canadian dollar a bit of a boost," said Doug Porter, chief economist at BMO Capital Markets in Toronto. The Canadian dollar ended the North American session at C$1.0981 to the greenback, or 91.07 US cents, stronger than Thursday's close of C$1.1039, or 90.59 US cents. The loonie hit a session high of C$1.0957 shortly after the jobs reports were released, the highest level since early March. For the week, the US dollar depreciated 0.6 percent against the Canadian dollar.
The strong jobs report at home was still unlikely to alter the Bank of Canada's stance, analysts said. The central bank has been a major driver of the Canadian dollar's direction since it shifted the tone of its policy last year. Canadian government bond prices were higher across the maturity curve, with the two-year was up 2 Canadian cents to yield 1.091 percent, and the benchmark 10-year was up 47 Canadian cents to yield 2.496 percent.

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