Investing.com - The Canadian dollar edged lower against its U.S. counterpart on Monday as Friday’s stronger-than-expected U.S. jobs report continued to underpin expectations for higher interest rates.
USD/CAD inched up 0.1% to 1.2861 by 09:22 AM ET (14:22 GMT), within striking distance of Friday's one-week high of 1.2878.
Demand for the dollar continued to be underpinned after Friday’s U.S. jobs report underlined expectations for a rate hike by the Federal Reserve at its upcoming meeting.
The U.S. economy added a larger-than-forecast 228,000 jobs in November the Labor Department reported, but the report also showed that wage growth remained tepid.
The Fed is widely expected to raise interest rates at its two-day policy meeting that will end on Wednesday but the disappointing wage data could still weigh on the pace of interest rate hikes next year.
The loonie remained on the back foot after the Bank of Canada kept interest rates on hold last Wednesday and tempered expectations for a rate hike in the coming months, despite a strong Canadian employment report for November.
The central bank hiked rates in July and September for the first time in seven years but has since turned more cautious on the outlook for the economy.