Loonie Surges on Strong Jobs Report, Analysts See Near-Term Stability

Canada's dollar surged to an eight-week high on Friday after a stronger-than-expected jobs report, with currency analysts expecting it to hold near current levels for several months before firming over the coming year.

A Reuters poll of 34 foreign exchange analysts forecast the loonie to strengthen 2.6 percent to 1.366 per US dollar in 12 months, up marginally from 1.36 in the earlier forecast.

The Canadian employment rose by 75,100 in July, far above expectations for a gain of 16,500, while the unemployment rate fell to a two-year low of 6.4 percent.

CIBC Capital Markets' senior economist Andrew Grantham wrote that the report suggests growth momentum seen in the second quarter may have carried on into the start of Q3.