The Canadian dollar traded in the tightest range in almost a month against its U.S. counterpart on concern strong employment data last week may not translate into sustained economic growth.
The currency fluctuated after gaining for three days versus the greenback after reports on March 8 showed both the U.S. and Canada created more jobs than expected last month. The Canadian currency has depreciated for five straight weeks, the longest slide since June, after Bank of Canada Governor Mark Carney said in January slower-than-forecast growth would keep interest rates low.
“The U.S. economy is out-pacing some of the other large markets and the Dow has been quite impressive, so I think this U.S. dollar story will continue and I think the Canadian dollar still has room to weaken off,” said Blake Jespersen, managing director of foreign exchange at Bank of Montreal by phone from Toronto. “We still prefer to buy dollar/Canada on dips and expect the commodity currencies to weaken off more than they have.”
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