The Canadian dollar CADUSD fell to its lowest level in more than two weeks against its U.S. counterpart on Friday as oil prices extended recent declines and data showed that Canada’s economy shed jobs for a second straight month in July.
Statistics Canada reported 30,600 positions were lost, missing analyst expectations for an increase of 20,000.
In contrast, U.S. employers hired far more workers than expected in July, providing the strongest evidence yet that the world’s biggest economy was not in recession, and boosting the U.S. dollar against a basket of major currencies.
After the two sets of job reports, money markets continued to fully price in a half-percentage-point interest rate hike by the Bank of Canada next month to fight inflation and see about a two-thirds chance of an even larger move of three quarters of a percentage point.
The Canadian dollar was trading 0.8% lower at 1.2970 to the greenback, or 77.10 U.S. cents, after touching its weakest since July 19 at 1.2984.
The price of oil, one of Canada’s major exports, dropped to its lowest in six months as concerns over a possible fall in fuel demand continued to rattle markets. U.S. crude oil futures were down 1.1% at $87.59 a barrel.
Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries.
The 10-year was up 7.3 basis points at 2.756% but falling 7 basis points below the yield on the equivalent U.S. bond.
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