The Canadian Dollar is trading sharply higher against its U.S. counterpart on Friday after a report from Statistics Canada (Statscan) showed the Canadian economy added a net 150,000 jobs in January, blowing away expectations. Meanwhile, the jobless rate held steady at 5.0%.
Analysts surveyed by Reuters had forecast a net gain of 15,000 jobs and for the unemployment rate to edge up to 5.1% in January. Additionally, Statscan revised December’s net gains downward to 69,200 jobs.
January’s job additions, the fifth consecutive monthly gain, were driven primarily by the core-age group of 25 to 54 year-olds and were spread across several industries, Statscan said.
At 13:45 GMT, the USD/CAD is trading 1.3370, down 0.0085 or -0.63%.
Internal Figures Point toward Tight Labor Market
Employment in the goods sector increased by a net 25,400 jobs led by construction. Service sector jobs jumped by a net 124,700, mostly in wholesale and retail trade and the healthcare and social assistance subsectors.
The average hourly wage for permanent employees rose 4.5% in January on a year-over-year basis, down from 4.7% in December.
Strong Jobs Data Likely to Boost Odds of another Bank of Canada Rate Hike
Labor market tightness was among the main reasons behind the Bank of Canada’s decision in January to raise rates for the eighth time in less than a year, according to minutes from its policy-setting meeting released on Wednesday.
Although annual average hourly wages dipped slightly, the jobs report was still too strong for the Bank of Canada to pause its rate-hiking campaign.
The USD/CAD likely soared because of increased bets on a BOC rate hike at its next meeting on March 8.
