The Canadian dollar weakened slightly against a widely stronger U.S. counterpart on Friday as statistics revealed U.S. job growth increased at a solid clip in November, adding to the loonie’s sharpest weekly decline since late October.
The Canadian money dropped 1.3 percent over the course of this week, with losses accelerating after Wednesday, when the Bank of Canada held interest rates steady as expected however surprised some with a subdued response to Canada’s own powerful November jobs report last Friday that tempered expectations for a rate increase in coming months.
“The Bank of Canada has clearly indicated they are still cautious at this time,” said Eric Theoret, a currency strategist at Scotiabank, who stated a look next Thursday by Bank of Canada Governor Stephen Poloz could be an integral opportunity to update the market on the central bank’s views.
“The story for this season has been this rapid change from the Bank of Canada from attentive to aggressive to careful,” he said.
The central bank increased rates twice before this year.
At 4 p.m. ET, the Canadian dollar was trading at $1.2867 to the greenback, or 77.72 U.S. cents, down 0.1 percent.
The money’s strongest level of this session was $1.2805, while it struck its weakest since Dec. 1 at $1.2880.
Speculators had trimmed bullish bets on the Canadian dollar going in the Bank of Canada rate conclusion, data in the U.S. Commodity Futures Trading Commission and Reuters calculations revealed. As of Dec. 5, net long positions had slipped to 42,466 contracts from 45,658 per week earlier.
The slide on the day for the Canadian money came despite higher oil prices and company domestic data.
Canada’s capacity utilization climbed to 85.0 percent in the third quarter, signaling a 10-year high, as gains in the building industry offset lower extraction volumes from the oil and gas sector.
Separate data showed that Canadian housing starts rose sharply in November. The seasonally adjusted annual rate of starts climbed to 252,184 from October’s downwardly revised 222,695.
Canadian government bond prices were marginally lower across the yield curve, with the two-year cost down 1 cent to yield 1.503 percent and the grade 10-year decreasing 4 cents to yield 1.861 percent.