Loonie rises to four-month high on oil price rally, despite weak employment numbers

The Canadian dollar rose using the price of crude oil even as a study showed the country unexpectedly unemployment in February.

The currency reached a four-month at the top of a rally in oil, which, until last year’s price collapse was Canada’s largest export, and demand for higher-yielding assets on the strength of a stimulus plan from the European Central Bank announced Thursday. It’s trading about 6 cents stronger than the level forecasters expect for mid-year, and 5 cents stronger than where it’s projected to finish the year, according to the median estimates of strategists surveyed by Bloomberg.

“For that Canadian dollar, the market’s centered on the squeeze in oil prices,” said Mark McCormick, United states head of foreign-exchange strategy at Toronto-Dominion Bank, who added he expects the currency to weaken longer term to $1.37 per U.S. dollar. “Weak employment numbers probably could shift the probabilities for the Bank of Canada and make the market to price in another cut.”

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Canada’s dollar continues to be the very best performer in the planet since the Bank of Canada refrained from cutting rates of interest at its Jan. 20 meeting. The central bank this week again kept its benchmark rate unchanged at 0.5 per cent.

The loonie was up 1 percent to $1.3219 per U.S. dollar at 9:53 a.m. in Toronto, reaching the the strongest level since Nov. 5. One loonie buys 75.64 U.S. cents.

Benchmark prices for United states crude are trading at US$38.86 per barrel, up from the February low of US$26.05.

The currency briefly pared gains following a report showed a couple,300 stop by payrolls, compared with a forecast for any 10,000 increase, according to the median estimate inside a Bloomberg survey of 18 economists. The nation’s jobless rate increased to 7.3 percent from 7.2 per cent.

Bloomberg News