The Canadian dollar CADUSD weakened against its U.S. counterpart on Friday as data showed the Canadian economy adding far fewer jobs than expected and the prospect of aggressive interest rate hikes by the Federal Reserve continued to weigh on investor sentiment.
The loonie fell 0.6% to 1.2905 to the greenback, or 77.49 U.S. cents, after trading in a range of 1.2815 to 1.2910.
On Monday, the currency touched its lowest level in more than four months at 1.2913. For the week, it fell 0.4%, its sixth straight week of declines.
“Weaker-than-expected Canadian April payroll data has been amplified by a continued selloff in stocks,” said George Davis, chief technical strategist at RBC Capital Markets. “With the risk backdrop worsening, we have seen broad-based USD strength.”
Canada added a modest 15,300 jobs in April, compared with estimates for a 55,000 gain, though the unemployment rate inched down to record low of 5.2% and the labor market remained very tight.
Meanwhile, U.S. data showed job growth increased more than expected in April, fueling investor worries of aggressive interest rate hikes to tame surging inflation.
U.S. stock indexes fell for a second straight day, while the price of oil, one of Canada’s major exports, settled 1.4% higher at $109.77 a barrel. Impending European Union sanctions on Russian oil raised the prospect of tighter crude supplies.
Canadian government bond yields rose across a steeper curve, tracking the move in U.S. Treasuries. The 10-year rose 6.1 basis points to 3.088%, the highest since July 2011.
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