Investing.com - The Canadian dollar fell against the U.S. dollar on Friday after data showed that the country’s economy unexpectedly shed jobs in August, indicating that the economic recovery is struggling to regain momentum.
USD/CAD touched highs of 1.0901 before paring back gains to 1.0879, up 0.06% for the day late Friday.
Statistics Canada reported that the domestic economy lost 11,000 jobs last month, compared to forecasts for jobs growth of 10,000. The country’s unemployment rate was unchanged at 7.0%, in line with forecasts.
But the greenback struggled to hold gains after another report showed that the U.S. economy added jobs at the slowest monthly rate this year in August.
The Labor Department reported that that U.S. economy added 142,000 jobs last month, disappointing expectations for jobs growth of 225,000. July’s figure was revised up to 212,000. The unemployment rate ticked down to 6.1% from 6.2% in July.
The report eased concerns that the recovery in the U.S. economy is progressing so rapidly that the Federal Reserve will be forced to raise rates sooner prevent the economy from overheating.
Demand for the greenback continued to remain supported after other economic reports earlier in the week indicated that the U.S. recovery is still on track. Data on Tuesday showed that the country’s manufacturing sector expanded at the fastest rate in more than three years in August.
Elsewhere, the Canadian dollar pulled back from nine month highs against the euro on Friday, with EUR/CAD up 0.12% to 1.4089 in late trade.
The pair fell 1.7% on Thursday after the European Central Bank cut rates to record lows and announced fresh stimulus measures in an attempt to shore up slowing growth and inflation in the euro area.
ECB President Mario Draghi said the decision came after long term inflation expectations deteriorated in August.
In the week ahead, investors will be looking ahead to Friday’s U.S. data on retail sales and consumer sentiment for further indications on the strength of the economic recovery. Data from Canada will bring a look at the country’s housing sector.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Wednesday as there are no relevant events on this day.
Monday, September 8
Canada is to release data on building permits.
Tuesday, September 9
Canada is to release a report on housing starts.
Thursday, September 11
The U.S. is to produce the weekly report on initial jobless claims.
Friday, September 12
The U.S. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to release what will be closely watched preliminary data on consumer sentiment.