Investing.com - The broadly stronger U.S. dollar rose to six year highs against the Canadian dollar on Friday as soft domestic employment data and expectations for higher U.S. interest rates weighed on the loonie.
USD/CAD hit highs of 1.2824, the strongest level since March 13 2009, and was last at 1.2781, up 0.76% for the day.
Official data showed that Canada’s economy shed 1,000 jobs in February, better than expectations for jobs losses of 5,000, but the unemployment rate ticked up to a five-month high of 6.8% from 6.6% in January.
The report showed that falling oil prices continued to impact on employment in the energy sector, which accounted for the bulk of February’s overall decline.
The Canadian dollar has fallen around 10% against the greenback so far this year as oil prices continued to tumble.
The price of crude oil, Canada’s largest export, has more than halved in value since the middle of last year, prompting the Bank of Canada to unexpectedly cut its interest rate to 0.75% from 1% in January.
Oil prices fell to six week lows on Friday after a bearish report from the International Energy Agency on global supply and demand.
Demand for the greenback continued to be underpinned by growing expectations that the Federal Reserve could start rising interest rates mid-year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, advanced 1.22% to 100.32 late Friday, a level last reached in April 2003.
In the week ahead, investors will be focusing their attention on Wednesday’s Federal Reserve policy statement to see if it would drop its reference to being patient before raising rates. Friday’s reports on Canadian inflation and retail sales will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 16
Canada is to publish data on foreign securities purchases.
The U.S. is to produce reports on industrial production and manufacturing activity in the New York region, as well as private sector data on the housing market.
Tuesday, March 17
Canada is to publish a report on manufacturing sales.
The U.S. is to report on building permits and housing starts.
Wednesday, March 18
Canada is to publish data on wholesale sales.
The Fed is to announce its federal funds rate and publish its rate statement, which outlines economic projection and the factors affecting the monetary policy decision. Fed Chair Janet Yellen is to hold what will be a closely watched a post-policy meeting press conference.
Thursday, March 19
The U.S. is to release reports on jobless claims, the current account and manufacturing activity in the Philadelphia region.
Friday, March 20
Canada is to round up the week with data on consumer inflation and retail sales.