By TraderVox.com
Tradervox (Dublin) – The Canadian dollar has strengthened against the greenback after employment appreciated in April to almost six times than it had been forecasted. This has encouraged sentiments that the Bank of Canada will raise interest rates. Earlier, the currency had declined almost to three months low but after the Statistics Canada Payrolls report, the Canadian dollar increased against all the 16 most traded currencies.
According to a Chief Currency Strategist at Toronto Dominion Bank, Mr. Shaun Osborne, the report from Statistics Canada is a strong one and it will get the market talking about an interest rate increase from the Bank of Canada. The loonie was able to reverse losses it had incurred earlier in the day prior to the release of the report. The report showed that employment increased by 58,200 jobs; in March, the employment grew by 82,300 jobs which is the largest increase since September 2008. This month the unemployment rate has reduced to 7.2 percent from 7.3 percent. The market was expecting an increase of 10,000 jobs and the interest rate to remain constant at 7.3 percent.
However, the likelihood that the interest rates might go up by September diminished after reports from the US showed that employers added the least jobs n April. US is Canada’s biggest partner and any bad reports from the world’s largest economy affects the Canadian economy. Earlier, speculation of interest rate hike had surged after policy makers had indicated that the it could go up earlier than it had been planned.
The loonie increased by 0.4 percent against the greenback to trade at 99.83 cents per dollar. It had weakened earlier to by as much as 0.4 percent trading at $1.0017. The report from the Statistics Canada has given support for the loonie seeing it close the week on a high against the dollar and most other world currencies.
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