Loonie follows upbeat jobs data to higher close

Fri Sep 4, 2009 4:42pm EDT
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By Frank Pingue

TORONTO (Reuters) - Canada's dollar rallied against the greenback on Friday and touched its highest level in a week as upbeat Canadian and U.S. jobs data helped spark demand for riskier assets.

The Canadian dollar was given an early boost after a report showed the Canadian economy unexpectedly added 27,100 jobs in August even though the unemployment rate rose to an 11-1/2 year high of 8.7 percent.

The currency's rally continued after data from the United States, Canada's biggest trading partner, showed employers cut fewer-than-expected jobs in August.

The reports were enough to send the Canadian dollar as high as C$1.0824 to the U.S. dollar, or 92.39 U.S. cents, shortly after midday, which marked its highest level since August 28.

"Obviously the initial culprit is the very strong Canadian jobs numbers that have lent a positive tone to Canada," said Eric Lascelles, chief economics and rates strategist TD Securities. "Canada was one of the stronger performers of the day, but just about everybody is up versus the U.S. dollar."

Activity during the second half of the session was quiet as many traders left early ahead of the long weekend. Financial markets in Canada and the U.S. will be closed Monday for Labor Day.

The Canadian dollar closed at C$1.0867 to the U.S. dollar, or 92.02 U.S. cents, up from C$1.1033 to the U.S. dollar, or 90.64 U.S. cents, at Thursday's close. It ended the week with a gain of 0.5 percent.

The rise in the Canadian dollar versus the greenback came alongside a number of the crosses, or overseas currencies. But it still managed to outperform most of them after having not participated in rallies earlier this week.   Continued...

<p>A Canadian one dollar coin, also know as a loonie, is shown in Montreal, April 28, 2006. REUTERS/Shaun Best</p>