BAKU, Azerbaijan, August 7. The Canadian dollar strengthened to its highest level in eight weeks against the U.S. dollar on Friday after stronger-than-expected employment data boosted confidence in Canada's economy.
The loonie rose 0.6% to 1.3935 per U.S. dollar (71.76 U.S. cents), its strongest intraday level since June 11, and was on track to gain 0.6% for the week.
Canada added 75,100 jobs in July, far exceeding economists' expectations of 16,500 new jobs, while the unemployment rate fell to 6.4%, its lowest level in two years.
CIBC Capital Markets Senior Economist Andrew Grantham said the figures suggest the country's economic momentum continued into the third quarter.
Meanwhile, weaker-than-expected U.S. employment data weighed on the U.S. dollar and fueled speculation over the Federal Reserve's next interest-rate decision.
Oil prices, a key driver for Canada's export-oriented economy, also supported the Canadian currency, with Brent crude trading about 0.5% higher at $77.64 per barrel as investors monitored developments surrounding the Strait of Hormuz.
Canadian government bond yields rose modestly, while the yield gap between Canadian and U.S. two-year bonds narrowed.
