Forex - Canadian dollar strengthens vs US dollar after strong employment data 02/08/2008

LONDON (Thomson Financial) - The Canadian dollar strengthened against the US dollar following a strong set of employment data, which dampened hopes for a large interest rate cut at the Bank of Canada's next meeting in March.

Statistics Canada said jobs rose by 46,000 in January, boosting the employment rate to a record high of 63.8 pct.

This brought the unemployment rate down to 5.8 pct from 5.9 pct in December, confounding Thomson IFR Markets' consensus expectation for a rise to 6.0 pct.

"The probability of the BoC doing a 50 basis point cut has dropped significantly," said James Vola at Thomson IFR Markets.

"The economy has had another monster print for employment and wages are rising, and the BoC does not seem likely to add to much fuel to the economy's fire."

At 12.49 pm, the US dollar had weakened to 1.0018 cad, from 1.0074 cad prior to the data.