Investing.com - The Canadian dollar fell to five-and-a-half year lows against the U.S. dollar on Friday after data showing Canada lost jobs for a second month in December, while the U.S. economy added more jobs that forecast.
USD/CAD hit highs of 1.1890, the most since May 2009, before pulling back to 1.1864 at the close. The pair ended the week with gains of 0.61%.
The drop in the Canadian dollar came after Statistics Canada reported that the economy shed 4,300 jobs last month after losing 10,700 in November. Economists had forecast jobs growth of 15,000. The unemployment rate remained steady at 6.6%.
Job losses were led by declines in part-time positions, which dropped by 57,700, Statistics Canada said, while full-time employment rose by 53,500.
The unexpectedly weak data indicated that the Bank of Canada is likely to keep interest rates on hold at 1%, where they have been since September 2010 for longer. The BoC is to hold its next monetary policy meeting on January 21.
At the same time, the Labor Department reported that the U.S. economy added 252,000 jobs last month, more than the 240,000 forecast by economists.
The unemployment rate ticked down to a six-and-a-half year low 5.6% from 5.8% in November. Economists had forecast a decline to 5.7%.
Still, the report showed that average earnings fell by 0.2% in December, missing expectations for a 0.2% increase and were up by only 1.7% from a year earlier.
The strong jobs report underlined the diverging economic recovery between the U.S. and Canada and did little to alter expectations that the Federal Reserve is on track to raise interest rates this year.
In the week ahead, the economic calendar is light, but markets will be looking ahead to Wednesday’s report on U.S. retail sales, as well as Friday’s data on consumer sentiment and factory output.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Tuesday as there are no relevant issues on this day.
Monday, January 12
The BoC is to publish its quarterly business outlook survey.
In the U.S., Atlanta Federal Reserve President Dennis Lockhart is to speak.
Wednesday, January 14
The U.S. is to produce data on retail sales, in addition to reports on import prices and business inventories.
Thursday, January 15
The U.S. is to publish the weekly report on initial jobless claims as well as data on producer prices and manufacturing activity in the Philadelphia region.
Friday, January 16
The U.S. is to round up the week with a report on industrial production and preliminary data on consumer sentiment.