Canada’s dollar fell for the first time in five days as U.S. jobless claims reached the lowest level since 2006 last week, boosting bets the Federal Reserve will slow asset purchases at its policy meeting next week.
The currency erased gains after earlier touching an almost four-week high versus its U.S. peer as fewer Americans than forecast filing for jobless benefits bolstered the case for the U.S. central bank to scale back the quantitative-easing program some consider negative for the U.S. dollar. The Fed meets Sept. 17-18. The data followed a U.S. payrolls report last week that showed slower-than-projected August job growth, while Canada added positions at three times estimates.
“As the Fed starts to wind up its QE program, more Canadian weakness should be expected against the U.S. dollar,” said Shaun Osborne, chief currency strategist at Toronto-Dominion Bank. “The economic recovery in Canada is still weak and continues to lag the U.S, for the most part.”
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