Canadian Dollar Rises to 10-Week High with Strong Job Data

The Canadian dollar reached its highest level in 10 weeks on Friday, supported by job data that exceeded expectations for the third consecutive month, thereby diminishing the chances of further interest rate cuts by the Bank of Canada in December.

The Canadian dollar increased by 0.4% to 1.3845 USD at 8:50 AM, compared to Thursday's close of 1.3850, marking its highest level since September 14.

It was the strongest among major currencies against the US dollar on Friday.

Government data showed an addition of 27,600 jobs in November, surpassing economists' expectations of 20,500 jobs, according to a Reuters survey.

The unemployment rate remained stable at 6.4%, compared to expectations of a decrease to 6.3%. Hourly wages rose by 3.5% year-over-year, compared to 3.6% in October.

"The data was stronger than expected, currently supporting the Canadian dollar," said Sean O'Sullivan, head of currency at Courier Capital Markets in Toronto.

"The stable unemployment rate indicates that the economy remains strong, reducing the pressure on the Bank of Canada to cut in December."

The Bank of Canada had lowered its key interest rate by 50 basis points in October and November, bringing the current rate to 3.75%.

Economists expect another 25 basis points cut on December 11, but the strength of the job data may cause the bank to hesitate. "Now, there is less chance of a cut in December," said Doug Porter, co-chief economist at BMO Capital Markets.

"The data reflects a stronger economy than we thought, supporting the Canadian dollar."

The Canadian dollar also strengthened against the euro and the British pound, rising 0.3% to 1.4865 euros and 0.4% to 0.7888 British pounds.

Key points (summary): Canadian dollar movement: increased by 0.4% to 1.3845 USD, highest level in 10 weeks (since September 14), strongest among major currencies against USD.

Job data: addition of 27,600 jobs in November (forecast: 20,500); unemployment rate stable at 6.4% (forecast: 6.3%); hourly wage +3.5% year-over-year (from +3.6% in October).

Impact on Bank of Canada: reduces chances of further cuts on December 11 (current rate 3.75% after two cuts of 50 basis points in October/November).

Other movements: +0.3% against the euro (1.4865 euros); +0.4% against the pound (0.7888 pounds).

Quotes: Sean O'Sullivan: "The data is stronger than expected, supporting the Canadian dollar."; Doug Porter: "Less chance of a cut in December, stronger economy."

This report reflects morning trading, and prices may change as the day progresses.