Data support for Canadian dollar

By @ibtimes on

The Canadian dollar strengthened on Friday as the domestic economic releases retained the strong tone seen last week. The employment data recorded a further 42,600 increase for November which was the third successive strong labour-market report while unemployment held at 4.9%

The data will boost confidence in the economy, although some caution is required as the employment data tends to be backward looking. Nevertheless, the employment gains will dampen market expectations of a further short-term Bank of Canada interest rate cut which will provide Canadian dollar support. In this context, comments from out-going Bank of Canada Governor Dodge will be watched closely later on Monday

The Canadian currency will still tend to weaken if oil prices come under renewed selling pressure and global growth doubts could undermine the currency slightly in the short term, especially if stock markets are subjected to further selling pressure.

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