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Canadian dollar strengthens 0.2% against the greenback
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Trades in a range of 1.3523 to 1.3664
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Canada’s economy adds 104,000 jobs in December
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Canadian bond yields rise across flatter curve
TORONTO, Jan 6 (Reuters) – The Canadian dollar strengthened against its U.S. counterpart on Friday, recouping its earlier decline, as investors raised bets on further tightening by the Bank of Canada after domestic data showed a huge jobs gain in December.
The Canadian economy gained 104,000 jobs last month, far exceeding analysts’ forecasts of 8,000, while the jobless rate unexpectedly declined to 5%, Statistics Canada data showed.
Money markets now see a 75% chance of a quarter-point interest rate hike by the BoC when it next meets to decide on policy on Jan. 25, up from 64% before the data.
The Canadian dollar was trading 0.2% higher at 1.3540 to the greenback, or 73.86 U.S. cents, after trading in a range of 1.3523 to 1.3664. For the week, the currency was on track to edge 0.1% higher.
The gain for the loonie came as separate data showed the U.S. economy maintaining a strong pace of job growth in December but some easing in the annual rate of wage gains.
Adding to support for the loonie, U.S. crude prices were up 2.1% at $75.25 a barrel, clawing back some of this week’s decline. Oil is one of Canada’s major exports.
Canada’s dollar will rally this year, but much of the upswing will have to wait until a period of uncertainty passes for the domestic and global economies following aggressive tightening by central banks in 2022, a Reuters poll forecast.
Canadian government bond yields rose across a flatter curve on Friday. The 2-year climbed 3.9 basis points to 4.079%, while the 10-year was up nearly one basis point at 3.191%. (Reporting by Fergal Smith; Editing by Andrew Heavens)
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