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Strong Canadian Jobs and US-China Trade Talk Boosts Loonie

The Canadian dollar strengthened to a four-week high against its U.S. counterpart on Friday after domestic data showing a much bigger-than-expected jobs gain in September supported bets for the Bank of Canada to keep interest rates on hold this month.

The Canadian economy added 53,700 jobs in September, the second straight month of robust jobs gains, Statistics Canada data showed. Analysts had forecast a gain of 10,000 jobs

Chances of a Bank of Canada interest rate cut at the October 30 policy decision dipped to 7 per cent from 9 per cent before the data, the overnight index swaps market indicated.

usdcad Canadian dollar graph, October 11, 2019

The central bank has kept its benchmark rate on hold at 1.75 per cent this year even as other central banks, including the Federal Reserve and the European Central Bank, have eased.

At 9:03 a.m. (1303 GMT), the Canadian dollar was trading 0.6 per cent higher at 1.3218 to the greenback, or 75.65 U.S. cents. The currency touched its strongest intraday level since Sept. 12 at 1.3206.

Rising investor hopes for a partial trade deal between the United States and China, as top negotiators from the two countries geared up to meet for a second day of talks, added to support for the loonie.

Via The Globe and Mail [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza
Alfonso Esparza

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