CAD: Canadian dollar climbs to 2-month high

The Canadian dollar (CAD) strengthened to a two-month high against its U.S. counterpart on Friday as domestic data contributed to the recent upswing in sentiment toward the currency, showing that the economy added more jobs than expected last month.

The Canadian dollar was trading 0.5% higher at 1.3495 to the greenback, or 74.10 U.S. cents, after touching its strongest level since Sept. 29 at 1.3488. For the week, the currency climbed 1%.

Canadian employment rose by 24,900 jobs in November, eclipsing the 15,000 gain that economists had expected, although hours worked fell and the jobless rate ticked up to 5.8%, as growth in the population continued to outpace employment growth.

Separate data showed Canada’s manufacturing sector contracting for a seventh straight month in November as global industrial weakness weighed on output and new orders.

The jobs data added to positive sentiment toward the loonie after the Canadian dollar was lifted by broad-based weakness in the U.S. dollar in recent weeks, said Michael Goshko, senior market analyst at Convera Canada.

The US dollar fell against a basket of major currencies as Federal Reserve Chair Jerome Powell struck a cautious tone on further interest rate moves.

The price of oil, one of Canada’s major exports, settled 2.5% lower at $74.07 a barrel as the market kept a wary eye on the latest round of OPEC+ production cuts.

Canadian government bond yields fell across the curve, tracking moves in U.S. Treasuries. The 10-year was down 9.3 basis points at 3.455%.