TORONTO (Reuters) – The Canadian dollar weakened against its broadly stronger U.S. counterpart on Friday as investors weighed U.S. and Canadian jobs data for its impact on the pace of central bank interest rate hikes.
The loonie was trading 0.2% lower at 1.3455 to the greenback, or 74.32 U.S. cents, after trading in a range of 1.3421 to 1.3520. For the week, it was on track to decline 0.6%.
Canada added 10,100 jobs in November, broadly in line with the forecast gain of 5,000, while the jobless rate fell to 5.1%, Statistics Canada said.
Money markets expect the Bank of Canada to raise interest rates by 25 basis points next Wednesday, with a roughly 15% chance of a larger move.
That’s not much different than before the data but the terminal rate, or the endpoint for rate hikes, seen over the coming months climbed to 4.36% from 4.22% after stronger-than-expected U.S. jobs data that could complicate the Federal Reserve’s intention to start slowing the pace of tightening this month.
The U.S. dollar rallied against a basket of major currencies and equity markets globally fell.
The price of oil, one of Canada’s major exports, rose ahead of a meeting of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) on Sunday and an EU ban from Monday on Russian crude. U.S. crude prices were up 0.4% at $81.51 a barrel.
Canadian government bond yields climbed across the curve, tracking the move in U.S. Treasuries. The 10-year was up 5.5 basis points to 2.889%.
(Reporting by Fergal Smith; Editing by Andrea Ricci)
