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Forex - USD/CAD holds at 28-month lows after strong Canadian data

Published 09/08/2017, 09:30 AM
© Reuters.  Greenback unchanged at multi-month lows vs. loonie in early trade
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Investing.com - The U.S. dollar was almost unchanged at a 28-month low against its Canadian counterpart on Friday, after the release of strong Canadian employment data and as the greenback continued to be pressured lower by geopolitical and natural events.

USD/CAD was little changed at 1.2113 by 09:30 a.m. ET (13:30 GMT), the lowest level since May 2015.

Statistics Canada reported on Friday that the unemployment rate fell unexpectedly to 6.2% in August from 6.3% the previous month.

The report also showed that the Canadian economy created 22,200 jobs last month, beating market expectations.

The strong data added to optimism over the strength of the Canadian economy, underlined by the Bank of Canada's surprise decision this week to raise the benchmark interest rate by 25 basis points to 1.00%.

Meanwhile, sentiment on the greenback remained vulnerable amid concerns over the impact of Hurricane Irma. The category 5 storm is projected to hit Florida over the weekend.

Market participants seemed to shrug off remarks by New York Federal Reserve President William Dudley on Thursday calling on the U.S. central bank to continue gradually raising interest rates, as low inflation should rebound.

Investors were also cautious amid speculation North Korea could launch an intercontinental ballistic missile on Saturday, which will mark the anniversary of the nation's foundation.

U.S. President Donald Trump said on Thursday that he would prefer not to use military action against Pyongyang to counter its nuclear and missile threat but that if he did it would be a "very sad day" for the North-Korean leadership.

The loonie was lower against the euro, with EUR/CAD adding 0.13% to 1.4588.

The single currency remained broadly supported after the European Central Bank left interest rates unchanged as expected on Thursday and signaled that information on the tapering of the central bank's asset-purchase program would be delivered in October.

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