Canadian dollar loses weekly winning streak as US jobs surge
THE Canadian dollar weakened against its US counterpart on Friday (Feb 3) and ended its run of weekly gains as US data pointed to economic strength that could make it harder for the Federal Reserve to bring inflation under control.
The US dollar rallied against a basket of major currencies as the US economy added many more jobs than expected in January.
“Today’s report does raise serious doubts about whether the economy is slipping into recession,” Sal Guatieri, a senior economist at BMO Capital Markets, said in a note. “If job growth remains strong and labour markets tighten further, this will compromise the Fed’s goal of restoring price stability.”
Optimism that inflation is easing and that central banks will soon pause their tightening campaigns has helped boost risk appetite since the beginning of the year.
The Bank of Canada has already signalled a pause after raising its benchmark rate to a 15-year high of 4.5 per cent recently. The price of oil, one of Canada’s major exports, extended its recent decline on the prospect of higher interest rates and as investors sought more clarity on the imminent European Union embargo on Russian refined products.
US crude futures settled 3.3 per cent lower at US$73.39 a barrel, while the Canadian dollar was trading 0.6 per cent lower at 1.34 per greenback, or 74.63 US cents.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
It has pulled back from its strongest level in 2½ months, which it touched on Thursday at 1.3260. For the week, it was down 0.7 per cent, following a streak of six straight weekly gains.
Domestic data showed that home prices in the Greater Toronto Area fell 1.2 per cent in January from December and were down about 22 per cent from their February peak.
Canadian bond yields rose across the curve, tracking the move in US Treasuries. The 10-year was up 9.4 basis points at 2.929 per cent. REUTERS
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
Singapore has to be realistic on global trends plaguing its stock market: DPM Wong
Google DeepMind unveils next generation of drug discovery AI model
AEM Holdings Q1 net profit tumbles 85% to S$2.4 million
World’s biggest tea buyer Lipton’s sale of last farms is a strategy shift
JPMorgan, Nomura limit Segantii exposure on Hong Kong case
Insurance firms deny Chevron’s US$57 million claim for Iran oil seizure