The Canadian dollar hit a six-week high after a report indicated that the economy added in more workers, resulting in an unexpected fall in unemployment rate.
The loonie surged against 10 out of its 16 major peers after U.S. reported lower employment figures than forecasted. U.S. is Canada’s largest trading partner. The Canadian dollar has been the worst-performing currency this year as the market speculated that the sluggish growth will make the Bank of Canada raise interest rates later after the Federal Reserve does so.
The Bank of Canada will meet on April 16. Its Governor, Stephen Poloz was recently quoted on March 18 as saying that the central bank will cut the rate if the economy weakens.
“It was a strong number with strong details, and that’s positive for Canada,” Camilla Sutton, the Toronto-based head of currency strategy at Bank of Nova Scotia told Bloomberg “What we have left is where that leaves Governor Poloz. Should he sound as dovish as he did the other week on April 16, that will resurge the weakness story? Should he sound quite neutral, that will bring further gains for the Canadian dollar.”
The Canadian dollar was up 0.5 percent to C$1.0981 a U.S. dollar as of 5 p.m. in Toronto trade. This is its highest level since February 18. The currency rose in its second straight week, advancing 0.7 percent. Currently, one Canadian dollar purchases 91.07 U.S. cents.
So far, Canada’s dollar has weakened 3.3 percent versus the dollar since January, making it the worst performer among 16 major counterparts. The currency has also plunged 4 percent in 2014 against a bundle of 10 developed-nation currencies based on Bloomberg Correlation-Weighted Indexes. The greenback has plunged 0.4 percent, while the euro has slid 0.7 percent.
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