The Canadian dollar rose after a report showed the nation unexpectedly added jobs last month and the unemployment rate dropped to a six-year low.
The currency strengthened versus almost of its 31 major counterparts. The rise in payrolls comes after Bank of Canada Governor Stephen Poloz said on Nov. 3 the economy still requires monetary stimulus to drive the recovery in the face of “headwinds” of weak global growth.
“It’s just given reason for the market to rethink the outlook for the Canadian economic backdrop as well as the Canadian dollar,” Camilla Sutton, chief foreign exchange strategist at Bank of Nova Scotia, said by phone from Toronto. “The combination of a weak Canadian dollar with a strong U.S. recovery has some benefits to Canada. The economic backdrop is not as miserable as some had expected.”
The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, rose 0.5 percent to C$1.1361 per U.S. dollar at 9:28 a.m. in Toronto. One loonie buys 88.02 U.S. cents. It reached C$1.1467 on Nov. 5, the weakest since July 2009.
Employment rose by 43,100 after a jump of 74,100 the prior month and the jobless rate fell to 6.5 percent from 6.8 percent, Statistics Canada said today. Both results exceeded all economist predictions in a Bloomberg News survey that called for unemployment to rise to 6.9 percent on 5,000 job losses.
The loonie also benefited as U.S. data showed payrolls increased by 214,000 in October. The median forecast in a Bloomberg survey of 100 economists called for a 235,000 advance.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.