C$ crests to 12-month high as jobs top views
By Solarina Ho
TORONTO (Reuters) - The Canadian dollar peaked to its firmest level in a year against its U.S. counterpart on Friday as a "perfect storm" of risk appetite and stronger-than-expected domestic employment data pushed the currency through the C$0.98 level.
The Canadian economy added 34,300 jobs last month, topping all expectations of analysts surveyed by Reuters. Canada has recouped all the jobs lost in the recession, and employment stands 176,600 higher than in August 2011, with most of the increases in full-time positions.
"It's likely to support the already hawkish stance of the Bank of Canada. We've had a slew of some disappointing domestic data recently, so this is a positive development for the Canadian dollar," said Camilla Sutton, chief currency strategist at Scotiabank.
By contrast, in the United States jobs growth slowed sharply in August, with nonfarm payrolls increasing less than expected. The weak report strengthens the case for the Federal Reserve to pump more money into the sputtering economy.
Fed Chairman Ben Bernanke has said the U.S. central bank is seriously considering a third round of monetary policy easing to help counter the "grave" stagnation of the U.S. labor market.
"The surprisingly strong Canadian employment numbers relative to the disappointing U.S. numbers gave Canada a boost and on top of that, the weak U.S. numbers prompted more speculation of QE3," said Benjamin Reitzes, senior economist and foreign exchange strategist at BMO Capital Markets.
The currency finished its North American session at C$0.9782 against the U.S. dollar, or $1.0223, from Wednesday's close of C$0.9828, or $1.0175. Earlier, it touched C$0.9766, or C$1.0240, matching the level hit on September 19, 2011.
The Canadian dollar had already been buoyed by Thursday's announcement by the European Central Bank that it will launch a new and potentially unlimited bond-buying program to lower borrowing costs for struggling euro zone countries. Continued...