TORONTO -(Dow Jones)- The Canadian dollar has rallied sharply after news that Canadian employment grew by 46,400 in January, surpassing the expected 10,000 increase.
The U.S. dollar tumbled against its Canadian counterpart immediately after the news, and is currently trading around C$1.1015 after touching the C$1.0000 area in rapid-fire trading after the data. It was around C$1.0073 before the news.
Trading in the currency remains active.
The unemployment rate dropped unexpectedly to 5.8% in January from 6.0% in December.
Analysts had expected an unemployment rate of 6.0%.
The U.S. dollar has been trading around the parity mark with the Canadian dollar in recent sessions, but had recently moved towards the top of trading ranges. Its sessional high Friday was C$1.0099, according to electronic trading system EBS.
The Canadian dollar's sharp rally after the data was a knee jerk reaction to the headline strength, said Mark Chandler, fixed income strategist at RBC Capital Markets.
In order for the Canadian dollar to move significantly higher from current levels, there would have to be indications of an overall change of direction from the Bank of Canada on monetary policy, Chandler said.
Most analysts expect the bank to continue easing interest rates at a moderate pace after cutting them by 25 basis points at their last two policy dates.
The January jobs data reflect current conditions and will therefore not exert a large impact on the bank's policy, Chandler said.
The U.S. dollar tumbled against its Canadian counterpart immediately after the news, and is currently trading around C$1.1015 after touching the C$1.0000 area in rapid-fire trading after the data. It was around C$1.0073 before the news.
Trading in the currency remains active.
The unemployment rate dropped unexpectedly to 5.8% in January from 6.0% in December.
Analysts had expected an unemployment rate of 6.0%.
The U.S. dollar has been trading around the parity mark with the Canadian dollar in recent sessions, but had recently moved towards the top of trading ranges. Its sessional high Friday was C$1.0099, according to electronic trading system EBS.
The Canadian dollar's sharp rally after the data was a knee jerk reaction to the headline strength, said Mark Chandler, fixed income strategist at RBC Capital Markets.
In order for the Canadian dollar to move significantly higher from current levels, there would have to be indications of an overall change of direction from the Bank of Canada on monetary policy, Chandler said.
Most analysts expect the bank to continue easing interest rates at a moderate pace after cutting them by 25 basis points at their last two policy dates.
The January jobs data reflect current conditions and will therefore not exert a large impact on the bank's policy, Chandler said.
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