USD/CAD below 1.1050 after Job Gains

The Canadian dollar rose for a second day after job creation rebounded, damping speculation the Bank of Canada will cut interest rates to spur the economy.

The currency gained against all except four of its 16 major peers as Canada added 29,400 jobs in January after losing positions the prior month, and the jobless rate fell. The U.S. added fewer jobs than forecast. Canada’s dollar fell 4.5 percent last month for its worst start to a year since at least 1972 as the Bank of Canada spurred speculation that it may cut interest rates, saying inflation would fall below target this quarter.

“The numbers, particularly the bounce-back in full-time employment, suggest those that were anticipating immediate action and a response from the bank certainly are on the defensive,” Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce, said by phone from London. “We never seriously thought the bank would cut, but clearly the market has been taking those thoughts seriously.”


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