Canada’s dollar gained to the strongest level in more than six weeks after the economy added more jobs than forecast in March, rebounding from a decline the previous month, and the unemployment rate unexpectedly fell.
Futures traders reduced bets that the Canadian dollar will decline against its U.S. counterpart by the most on record amid speculation China will add monetary stimulus, boosting demand for raw materials and energy.
The Canadian dollar rose from a four and a half year low after reports showed inflation and retail sales grew faster than forecast, damping bets the Bank of Canada will cut interest rates to bolster the economy.
Canada’s dollar strengthened for the first week in three as risk appetite outweighed concern that Europe’s sovereign-debt crisis is worsening, sending crude oil, the nation’s biggest export, and stocks higher.
Canada’s dollar weakened the most this month versus the greenback and the yen as evidence of a slowing U.S. economic recovery made the currencies of countries reliant on commodity exports less attractive.
The Canadian dollar rose from almost the lowest point in more than three years on bets the currency had fallen too far, too fast after the Federal Reserve announced it would slow its monetary stimulus program.
The Canadian dollar snapped three weeks of losses on jobs gains that tripled the forecast even as U.S. employment growth faltered, accelerating a rally than began as the Bank of Canada reiterated that policy is appropriate.