Investing.com - The U.S. dollar rallied against the Canadian dollar on Friday boosted by a strong jobs report while the Canadian dollar was pressured lower by weak domestic economic data.
The Labor Department reported that the U.S. economy added 295,000 jobs in February, far more than the 240,000 forecast by economists. The unemployment rate ticked down to 5.5% from 5.7% in January, the lowest since May 2008. Economists had forecast the unemployment rate would fall to 5.6%.
The robust jobs report fuelled expectations that the Federal Reserve will start raising interest rates around the middle of this year.
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, jumped 1.39% to 97.74 late Friday, the highest since September 2003.
Sentiment on the loonie was hit after official figures showed that Canada posted a larger-than-forecast trade deficit of C$2.45 billion in January as low oil prices hit Canada's crude exports.
Another report showed that the value of Canadian building permits issued in January fell 12.9% to C$6.13 billion, far worse than forecasts of a 4.3% decline.
The weak data underlined the diverging monetary policy stance between the Federal Reserve and the Bank of Canada.
USD/CAD was last up 1.09% to 1.2622 in late trade.
The BoC kept rates on hold at 0.75% its meeting earlier in the week, saying it wanted to see what the further impact of January’s rate cut would be before altering policy again.
In the week ahead, markets will be watching Thursday’s U.S. retail sales report for further indications on the strength of the recovery, while Friday's Canadian jobs report 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 9
Canada is to release data on housing starts.
Tuesday, March 10
The U.S. is to release data on wholesale inventories.
Wednesday, March 11
The U.S. is to publish a government report on crude oil inventories.
Thursday, March 12
Canada is to publish data on new house price inflation.
At the same time the U.S. is to produce data on retail sales and initial jobless claims.
Friday, March 13
Canada is to publish its monthly employment report.
The U.S. is to round up the week with data on producer prices and consumer sentiment.