The Canadian dollar jumped to a two-year high against its U.S. counterpart on Friday after monthly U.S. job growth slowed more than expected and chances of a Bank of Canada interest rate hike next week approached a coin toss.
The U.S. Labor Department said nonfarm payrolls rose by 156,000 in August, which should allow the Federal Reserve to announce a plan to start trimming its massive bond portfolio this month. But an anemic gain in wages may make the central bank cautious about raising rates again this year.
In contrast, chances of a Bank of Canada rate hike as soon as next week rose to nearly 50 percent. The probability was around 20 percent before data on Thursday showed Canada’s economy expanding in the second quarter at its fastest pace in nearly six years. Click here to read more.