Investing.com - The Canadian dollar fell against the U.S. dollar on Friday following a stronger-than-forecast U.S. jobs report, but pared back losses amid concerns that the upbeat data would not prompt the Federal Reserve to raise interest rates sooner than expected.
USD/CAD touched highs of 1.1005, the most since April 29, before retracing some of those gains to close at 1.0971, 0.10% higher for the day. The pair lost 0.47% on the week.
The pair is likely to find support at 1.0920 and resistance at 1.1030.
The Labor Department reported Friday that the U.S. economy added 288,000 jobs in April, well above expectations for jobs growth of 210,000. The U.S. unemployment rate dropped to a five and a half year low of 6.3%, compared to expectations for 6.6%.
The report also showed that the labor force participation rate, which measures the proportion of people either working or looking for work, fell to 62.8% from 63.2% in March. Meanwhile, average wage growth edged down in April from the same month a year earlier, dampening the medium term inflation outlook.
Earlier in the week, preliminary data showed that U.S. gross domestic product grew at an annual rate of just 0.1% in the first three months of the year, well below forecasts for an expansion of 1.2%.
Despite the sharp slowdown in growth the Federal Reserve said Wednesday it would reduce its bond purchases to $45 billion a month. The Fed also said interest rates would remain on hold at record lows for a "considerable time" after the bond-buying program ends later this year.
The U.S. central bank acknowledged that first quarter growth was far weaker than expected, but added that growth had started to pick up in recent weeks.
In the week ahead, investors will be looking ahead to Monday’s report on U.S. service sector activity and Wednesday’s testimony by Fed Chair Janet Yellen on monetary policy and the economy.
Meanwhile, Canada is to publish its jobs report for April on Friday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 5
In the U.S., the Institute of Supply Management is to publish a report on service sector activity.
Tuesday, May 6
Both Canada and the U.S. are to release data on trade, while Canada is also to publish its Ivey PMI.
Wednesday, May 7
Canada is to produce data on building permits.
Fed Chair Janet Yellen is to testify before the Joint Economic Committee of Congress, in Washington.
Thursday, May 8
Canada is to release data on new house price inflation, while the U.S. is to publish the weekly report on initial jobless claims.
Friday, May 9
Canada is to round up the week with data on the change in the number of people employed and the unemployment rate.