LONDON (Thomson Financial) - Unexpectedly strong Canadian jobs data, as well as further sharp gains in the oil price, allowed the Canadian currency to continue its relentless surge higher against the US dollar.
Figures out of Canada today showed the economy created 63,000 jobs last month, confounding forecasts for a much smaller gain of just 11,000 after a very strong gain the previous month. In addition, the unemployment rate fell to a 33-year low of 5.8 pct, while the employment rate reached an all-time high of 63.7 pct.
Yet another set of strong Canadian data, combined with high oil prices -- which typically benefit the Canadian dollar given the country's status as a major oil exporter -- caused the currency to surge to a 47-year high of 0.9320 per US dollar.
"The Canadian employment data were strong last month and were strong again this month and as a consequence the currency is still firm," said Steve Barrow at Bear Stearns.
He noted that much of the jaw-boning by Canadian politicians about the damage the currency's strength is doing to its manufacturing sector has died down. This has been replaced by a broad acceptance that little can be done about the slump in demand for the US dollar, with the debate turning to the possibility of cutting taxes.
Though major currencies have all staged gains against the US dollar despite much stronger-than-expected jobs data out of the US, the Canadian dollar has been the major gainer, rising sharply against a range of currencies.
At 16.54 pm GMT, the Canadian dollar was trading at 0.9351 per usd.
Over the past eight weeks, the Canadian dollar has gained over 11 pct against the US dollar.
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