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Updated 1.3311, the highest price in two months.
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Canadian economy cuts 17,300 jobs in May
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10-Year Yield Falls 7 Basis Points To 3.368%
(Updated at 4:30 PM ET (2030 GMT))
by Fergal Smith
TORONTO (Reuters) – The Canadian dollar was little changed against the U.S. dollar on Friday as investors continued to bet on another Bank of Canada rate hike despite unexpected job losses in domestic data. , held near two-month highs.
The dollar was trading broadly unchanged at $1.3445 (74.93 US cents) after hitting $1.3311, its highest intraday level since April 14. It rose 0.6% on the week, marking the second straight week of gains.
“The Canadian dollar has extended its strong start into June as it retests the lower end of its trading range against the US dollar, which has prevailed since late last year,” Shaun Osborne, chief currency strategist at Scotiabank, said in a note. said.
“The clear catalyst for the Canadian dollar’s rally was Wednesday’s central bank rate tightening, which was motivated by resilient demand and persistent inflationary pressures, with policymakers clearly pushing the dollar above 2%. I am concerned that it will become more entrenched.”
On Wednesday, the central bank raised the benchmark rate by 25 basis points to 4.75%, the highest level in 22 years.
The short-term money market sees a 60% chance of another rate hike in July. Although down from 68% before the jobs report was released, the move remained fully priced into September.
Canada’s economy lost 17,300 jobs in May, below the expected 23,200 job gains, and the unemployment rate rose for the first time in nine months.
Crude oil, one of Canada’s main exports, fell 1.6% to settle at $71.25 a barrel as disappointing Chinese data raised doubts about demand growth.
Canadian government bond yields fell across the curve and moved in the opposite direction to US yields.
The 10-year bond fell seven basis points to 3.368% after hitting 3.466% on Thursday, its highest intraday level in more than three months. (Reporting by Fergal Smith, Editing by Jonathan Ortiz and Cynthia Osterman)
