BOE Rate Cut Hangs in Balance Amid Signs of Election Bounce By Bloomberg



(Bloomberg) — A closely watched measure of U.K. economic activity unexpectedly surged to the highest level since 2018 in January, leaving the prospects for a Bank of England interest-rate cut next week hanging in the balance.

IHS Markit’s flash for output across the whole economy jumped to 52.4 as firms cited reduced political uncertainty in the wake of Boris Johnson’s decisive election victory. That’s up from 49.3 last month.

The Purchasing Managers Indexes had emerged as a key factor in the debate over BOE easing this month, providing the most up-to-date assessment of the economy after the Conservatives’ win on Dec. 12. While the reading was higher than forecast and above the level many economists said was enough to stave off a rate cut, traders were still pricing in a greater-than 50% chance of a move after the release and the was little changed.

The data was “marginal above the level of 52, where one could expect the Bank of England starting to become more reluctant to cut,” said Mikael Olai Milhoj, a Danske Bank analyst. A cut is “still a real possibility but a close call as things stand.”

One reason why the debate over the need for easing may not be over is that BOE officials have also indicated that reports from their agents — a cross-country network that holds confidential conversations with businesses and community organizations — could prove critical. Investors and forecasters will be in the dark about that intelligence until the decision is announced, when the accompanying Monetary Policy Report will include a section summarizing the feedback.

Markit said the Friday’s composite figure, which was up from 49.3 last month and came in well above the 50.7 median-estimate of economists, was consistent with a quarterly growth rate of about 0.2%. That’s good news for Johnson as he prepares to officially take the U.K. out of the European Union next week.

“It seems likely that the rise in the PMI kills off the prospect of an imminent rate cut, with policy makers taking a wait and see approach as they assess the performance of the economy in the post-Brexit environment,” said Chris Williamson, Markit’s chief business economist.

While a January rate cut was seen as unlikely at the start of 2020, a spate of weak data, along with dovish comments from policy makers, boosted speculation a move was coming. Bets moderated slightly this week after some more positive releases.

Two of the BOE’s nine officials have already voted for easing, while a number of others, including Governor Mark Carney, have indicated they would be paying close attention to the data before making up their minds.

“We think it’s a close call,” said Ned Rumpeltin, European head of foreign exchange at Toronto-Dominion Bank. “But ultimately we think the sum total of what we’ve seen in the UK’s recent data overall will be enough to motivate a cut next week.”

The PMIs, like a report earlier this week from the Confederation of British Industry, showed optimism among firms had jumped following the election, with Markit’s measure reaching the highest since June 2015. They also suggested the pickup may translate into real growth, with measures of new work rising strongly.

The flash readings, based on 85% of responses, showed a gauge for the U.K.’s dominant services sector alone jumped to a 16-month high of 52.9, from 50 last month. Meanwhile an index for manufacturing reached 49.8, up from 47.5 in December and approaching the 50 level that separates expansion from contraction. Final readings will be released in the first week of February

The PMIs have previously come under criticism for being overly sensitive to political developments, while Carney said last year that they can be a misleading indicator of economic output in times of extreme uncertainty.

For example, in the immediate aftermath of 2016’s Brexit vote, they presented a far gloomier picture of the economy than ultimately came to pass, a phenomenon that repeated itself last year.





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UK business perks up after election, weakening case for rate cut: PMIs By Reuters



By Andy Bruce

LONDON (Reuters) – British companies are enjoying their best month in more than a year, a survey showed on Friday, the strongest evidence yet of a post-election boost to the economy that could deter the Bank of England from cutting interest rates next week.

The ‘flash’ early readings of the IHS Markit/CIPS UK Purchasing Managers’ Index (PMI) showed Britain’s vast services sector returned to growth in January for the first time since August, while a downturn in manufacturing eased.

Britain’s performance bettered the euro zone’s for the first time since December 2018, as the PMI suggested the world’s fifth-largest economy looked on track to grow around 0.2% in quarterly terms after it slowed to a crawl late last year.

Earlier signs of weakness in the labor market had prompted two BoE rate-setters to vote for lower borrowing costs at the end of last year. Three others, including Governor Mark Carney, have hinted recently that more economic stimulus might be needed.

But Friday’s figures are likely to prompt investors to curb bets that the BoE will cut rates next Thursday, corroborating earlier signs that uncertainty among businesses and consumers has been tempered by Prime Minister Boris Johnson’s landslide victory last month.

The composite PMI, which combines manufacturing and services indexes, rose to 52.4 from 49.3, the highest reading since September 2018 and easily beating the 50.6 consensus forecast in a Reuters poll of economists.

The services PMI rose in January to 52.9 from 50.0, also its highest level since September 2018 and well above the consensus forecast in a Reuters poll of 51.0.

Service-sector optimism hit its highest in nearly five years this month, chiming with other business surveys from the Confederation of British Industry and Deloitte.

“It seems likely that the rise in the PMI kills off the prospect of an imminent rate cut by the Bank of England, with policymakers taking a wait-and-see approach as they assess the performance of the economy in the post-Brexit environment,” IHS Markit chief business economist Chris Williamson said.

Still, the services PMI remained at levels historically associated with additional stimulus from the BoE and a long way below the survey’s long-run average of 54.8.

The reading for British factories was also better than expected, rising to 49.8 from 47.5, the highest level since April.

While the PMI signaled the ninth month of contraction for manufacturing, which accounts for 10% of economic output, new orders increased for the first time since April.

“The uplift in sentiment about the outlook hints at even better growth to come, but confidence needs to continue to rise to ensure this solid start to the year has legs,” Williamson said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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Australia’s Unemployment Rate Unexpectedly Falls to 5.1% in December By Bloomberg



(Bloomberg) — Australian unemployment unexpectedly declined in December as the labor market persisted in defying a sluggish economy, prompting a surge in the currency as traders slashed bets on an interest-rate cut.

The jobless rate declined to 5.1%, compared with economists estimates for it to hold steady at 5.2%. Employment rose by 28,900 people — almost triple estimates — while participation remained at 66%. Bushfires resulted in “disruption to data collection” in New South Wales, Victoria and the A.C.T.

The currency jumped more than half a percent as traders are now pricing in just a 24% chance of a rate cut next month, from 56% late Wednesday. The data extend a three-year run of hiring strength that has withstood volatility offshore and a slowdown at home.

Yet the job market’s health has failed to significantly push unemployment down to a level that would spark faster wages growth as it coincided with a swelling labor force. This led the Reserve Bank of Australia to cut rates three times since June to try to buttress investment and drive faster economic growth.

“These labor market figures will be interpreted in a positive manner,” said Callam Pickering, an economist at global jobs website Indeed Inc. who previously worked at the central bank. “However, with the bushfires likely to disrupt economic activity, and the with the Reserve Bank already leaning towards cuts, we expect further easing in the months to come.”

The Australian dollar surged to 68.79 U.S. cents following the report, up 0.6% from before the release. It was trading at 68.70 U.S. cents at 12:41 p.m. Sydney.

Indeed, the rise in employment was solely part-time, with full-time positions falling by 300, suggesting Christmas-related hiring.

Other details included:

  • New South Wales and Victoria, the most populous states, led the employment gains, with 20,600 and 10,300 respectively;
  • The mining hub of Western Australia, which has struggled since the end of the resources boom, led losses with 5,300;
  • Under-employment held at 8.3%

Governor Philip Lowe’s policy easing has so far delivered few results outside reinvigorating house price growth. He maintains “long and variable lags” in monetary policy mean it will take time for stimulus to work its way through the economy.

Consumer confidence fell 1.8% this month in response to the bushfire crisis, heading further into negative territory. While households are concerned about the economy, they are less pessimistic about their current and future financial situation — a good indicator of a healthy jobs market.

Moreover, rising property prices are a necessary forerunner to an eventual recovery in residential construction and in the shorter term should bring a wealth effect that supports consumption.

The RBA’s cash rate is at a record low 0.75% and Lowe estimates the lower bound at 0.25%, meaning he has just two cuts left in his policy arsenal before unconventional policy becomes a possibility.

The U.S. Federal Reserve’s recent pause after 75 basis points of rate cuts reduces the risk of the currency suddenly spiking. In addition, the signing of a phase one trade accord between the U.S. and China has lifted global sentiment and could encourage firms to press ahead with investment.

The RBA in its quarterly economic update in November forecast unemployment of 5.2% and wage growth of around 2.3% in 2020. It will release updated estimates on Feb. 7.

(Updates with comment from economist in fifth paragraph.)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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ILO sees end to falling global unemployment rate By Reuters



GENEVA (Reuters) – The global unemployment rate has stabilized after declining for nine years since the crisis, the International Labour Organization (ILO) said on Monday, and it could edge up next year as the world economy slows.

The rate stood unchanged at 5.4% in 2019, or 188 million people, and is expected to remain there in 2020 and rise to 5.5% in 2021, the ILO said in its annual report.

“This means that the gradual decline of the unemployment rate observed between 2009 and 2018 appears to have come to a halt,” it said, citing a world economic slowdown, especially in manufacturing.

Even for those with jobs, it is becoming harder for many to live better lives, or exit poverty, a trend Director-General Guy Ryder described as “extremely worrying” with “very profound and worrying implications for social cohesion”.

“Persisting and substantial work-related inequalities and exclusion have prevented them (millions of people) from finding decent work and better futures,” Ryder told journalists.

The ILO said that about 470 million people in total have insufficient paid work, a new data set which includes not only the unemployed but also the under-employed and those lacking access to the labor market.

The report noted the difficulties faced by young people in getting jobs, with 22% of those aged 15-24 not in employment, education or training.

It also noted the rate of female participation in the workforce remained at just 47%, 27 percentage points below the male rate. “We are not going where we want to go,” said Ryder, referring to a commitment by G20 leaders in 2014 to reduce the gender gap in the workforce.

The global working poverty is declining, the report said, but that masked limited progress in low-income countries, especially in sub-Saharan Africa, the report said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



UK confidence signs grow as Bank of England nears rate decision By Reuters



By Elizabeth Howcroft and Andy Bruce

LONDON (Reuters) – British households grew more confident about their finances and a measure of house prices rose by a record amount for January, according to surveys which added to other signs of a brightening mood in the economy since last month’s election.

Ten days before the Bank of England decides whether to cut interest rates, the surveys published on Monday suggested that some of the uncertainty that has weighed on the economy has lifted after Prime Minister Boris Johnson’s big election win.

IHS Markit, a data firm, said its Household Finance Index rose to a one-year high of 44.6 in January from 43.2 in December, chiming with other sentiment surveys from both businesses and consumers that have shown an increase in optimism.

Earlier on Monday, property website Rightmove said asking prices for houses increased in January at a record pace for the month, up 2.3% compared with December.

Still, BoE officials are likely to want to see whether the cheerier mood has translated into actual spending as they weigh up whether to cut rates on Jan. 30.

“What data there has been released capturing the post-election period suggests that the outcome has had a positive effect on consumer and business sentiment,” analysts at RBC said in a research note.

“Our view remains that a majority of (BoE officials) will prefer to wait for evidence of how the economy is responding to the outcome of December’s election and the removal of near-term Brexit uncertainty before deciding on a policy move.”

Money markets currently price in a roughly 65% chance that the BoE will cut interest rates on Jan. 30, although economists in a Reuters poll of economists published last week are more skeptical. Sixty out of 68 forecast no change to rates.

Investors will be watching Friday’s “flash” IHS Markit/CIPS purchasing managers’ indexes carefully for an early indication of the economy’s health this month.

Retail sales data last Friday showed an unexpected drop in December and investors will be eyeing Tuesday’s official labor market data for November carefully.

“Latest survey data certainly show some post-election bounce for UK households, with the headline index up to a one-year high and house price expectations at their strongest since October 2018,” Joe Hayes, an economist at IHS Markit, said.

Weakening inflation had helped to ease pressure on living costs, the survey showed.

However, a separate index measuring households’ expectations of future financial wellbeing slid back into negative territory in January, as gauges of perceptions of workplace activity and income weakened.

The proportion of households expecting a BoE rate cut “at some time” increased to 23.1%, while those expecting a rate hike in the next three months went down slightly to 19.5%, IHS Markit said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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Pound Falls After Weak U.K. Retail Boosts Prospect of Rate Cut By Bloomberg



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The slipped after U.K. data unexpectedly fell in December, increasing the chances that the Bank of England may cut a key interest rate this month.

Sterling dropped 0.2% to $1.3049 and declined against all its Group-of-10 peers as the volume of goods sold in stores and online fell 0.6% in December, confounding expectations of a 0.6% increase. Money markets are pricing a 75% chance of a rate cut on Jan. 30, compared with 62% on Thursday.

Markets are now turning their attention to impending purchasing managers’ indexes for further signs of the BOE’s direction.

“Clearly, there is a chance for a decent rebound of the PMIs next week and this may stay the BOE’s hand,” said Valentin Marinov, a strategist at Credit Agricole (PA:) SA. “That said, following this week’s weaker CPI and retail sales, the bar for stable rates is getting very high.”

Traders had been speculating that the central bank will cut rates at Mark Carney’s last monetary policy decision as BOE governor after a flurry of dovish comments from policy makers. The yield on 10-year U.K. government bonds was down three basis points at 0.61%, falling a sixth day and on course for its longest streak since August.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Fed’s Mission to Control Benchmark Rate May Spur Another Tweak By Bloomberg


© Reuters. Fed’s Mission to Control Benchmark Rate May Spur Another Tweak

(Bloomberg) — The benchmark interest rate that the Federal Reserve focuses on controlling to implement monetary policy has moved closer to the lower bound of its target range, increasing the prospect that the central bank will adjust one of its associated tools later this month.

The effective fed funds rate has been moving lower relative to the band since the Fed embarked on a series of repurchase-agreement operations and Treasury-bill buying to quell funding-market turmoil. Upheaval in September briefly saw fed funds rise above the upper bound of the range, but the measures to make more cash available over the turn of the year helped bring it down.

The effective fed funds rate fell to 1.54% on Friday from 1.55% a day earlier, according to New York Fed data released Monday. That put the rate just four basis points above the lower extremity of the Fed’s goal of 1.50% to 1.75%, the smallest such gap since the central bank began targeting a range rather than a single rate more than a decade ago.

“On the margin it raises the likelihood of some action, but it is yet to be determined,” said Credit Suisse (SIX:) strategist Jonathan Cohn.

When the fed funds rate strays, it can be a signal that the Fed doesn’t have strong control over its main tool for implementing monetary policy, a concern for central banks. The drift toward the lower end of the band has some observers speculating that the Fed might seek to lift the interest on excess reserves rate to help buoy it — in effect undoing one of its prior tweaks in the opposite direction.

IOER, which is the rate that banks earn when they park funds at the Fed beyond their reserve requirements, is one tool that policy makers can use to tinker with rates. And while it doesn’t necessarily act as either a hard cap or a floor, it has been used to help steer the fed funds rate.

It has previously adjusted where that benchmark stands relative to the overall range to help prevent the effective rate from drifting too high within the band. The most recent occasion was in the wake of September’s turbulence, when it reduced IOER by five basis points relative to the range — lowering it by 30 basis points rather than the 25 basis point reduction it made to the main range. It has also tweaked IOER on other occasions, including at meetings without monetary policy moves.

This time around, the effective fed funds rate is actually below IOER — something that hasn’t happened since 2018 — but a boost to the excess reserves rate could nonetheless help exert upward pressure on fed funds.

Any such move wouldn’t mark a change in the Fed’s broader monetary settings, as deciding on the overall target range is a separate question for policy makers. Bets in the interest-rate market continue to see the next move in the policy range as being down, although there is less than one quarter-point cut fully priced in for this year.

Minutes from the December Federal Open Market Committee meeting showed that officials discussed that it may be appropriate at some point to lift IOER and the rate on its facility for overnight reverse repurchase agreements to move the effective rate closer to the target range.

Strategists have said there are other ways policy makers could nudge the fed funds rate higher. This includes tweaking the size or rate on the central bank’s overnight and term repo offerings. Those changes could come as early as Tuesday when the schedule for the next round of operations is expected to be released.

Jefferies money-market economist Thomas Simons said even with the one-day drop in the effective rate, it’s still too early to know whether the Fed will adjust IOER at its Jan. 29 meeting. Simons said there’s a chance fed funds sets at 1.56% later in the week due to potential adjustments in the repo operations and Wednesday’s mid-month settlement of the U.S. Treasury’s coupon auctions.

“There’s a lot of different levers the Fed could pull that would better affect the effective rate and they could do that before the meeting,” he said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Fed’s Bostic: ‘High bar’ to any rate hike given need to raise inflation


ATLANTA (Reuters) – There is a “high bar” to the U.S. Federal Reserve raising interest rates given the need to raise inflation and guard against any drop in inflation expectations, Atlanta Fed president Raphael Bostic said on Monday.

“We worry about that. It is going to be a pretty high bar for us to make policy more contractionary,” Bostic said. “We are going to let the economy run and run hot enough to let inflation move.”

Reporting by Howard Schneider; Editing by Andrea Ricci



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Sterling Slips vs Dollar, Euro as Vlieghe Fuels Rate Hopes By Investing.com


© Reuters.

Investing.com — The dollar opened the week stronger against the and the Japanese , but weaker against the euro, with markets still unsettled by the weak labor market report on Friday.

The , which measures the greenback against a basket of currencies, was effectively unchanged at 3:10 AM ET (0810 GMT) at 97.130. However, that masked a 0.5% rise for the dollar against sterling, which continued to suffer from speculation on an interest rate cut from the Bank of England. The was up marginally at $1.1128.

Speeches by Governor Mark Carney and Monetary Policy Committee member Silvana Tenreyro last week had encouraged hopes of a cut. Over the weekend, another MPC member Gertjan Vlieghe, had signalled in an interview with the Financial Times that he would also back a rate cut barring “an imminent and significant improvement in the U.K. data.”

Vlieghe will get his chance to judge on that at 4:30 AM ET (0930 GMT) with the latest update on and its components, along with data for November. The National Institute of Economic and Social Research publishes its later at 9 AM ET (1400 GMT).

“Sterling seems to be caught between the bid from the under-weight asset managers and some speculators seeing the Brexit uncertainty lifted on the one hand, and the under-appreciated risks of a rate cut and a no-deal Brexit still on the other,” said Marc Chandler, managing partner of Bannockburn Global Forex. He sees a near-term range of $1.2900-$1.3200 for Cable.

The continued unrest in Iran over the weekend appears to have had little impact on broader sentiment, which is firmly in risk-on mode as the risk of war with the U.S. recedes and the signing of the preliminary trade agreement between China and the U.S. – scheduled for Wednesday – draws nearer.

The broke through 6.90 to the dollar for the first time in five months overnight, while the rose to a 20-month high. The dollar also continued to lose ground against other barometers of risk appetite such as the Indonesian and Turkish .

Analysts at Nordea pointed to the incongruity of sharply rising emerging market currencies, given the consistently weak numbers coming out of global purchasing manager indexes.

“Either EM FX and equities are too expensive or else the global manufacturing PMI is about to explode higher. It is do or die time,” analysts Andrea Steno Larsen and Martin Enlund said. “It’s very hard to find a trigger for a weakening market at present (outside of Iran maybe) but maybe that is a worrying sign in itself?”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Canada gains surprise 35,200 jobs in December, unemployment rate falls to 5.6% By Reuters


© Reuters. A woman walks past a “Help wanted” sign at a retail store in Ottawa

By Kelsey Johnson

OTTAWA (Reuters) – Canada gained a higher-than-expected 35,200 net jobs in December, entirely in full-time positions, while the unemployment rate fell to 5.6%, official data showed on Friday, figures that could ease some concerns about the strength of the Canadian economy.

Analysts in a Reuters poll had forecast a gain of 25,000 jobs in December and an unemployment rate of 5.8%. Wages for permanent employees rose by 3.8%, Statistics Canada said, lower than the 4.4% gain seen in each of the previous two months.

Canada shed an unexpected 71,200 net jobs in November, the biggest decline since 2009, while the national unemployment rate rose to 5.9%.

“It’s a decent rebound,” said Andrew Kelvin, chief Canada strategist at TD Securities.

“It should put some of the immediate fears around the Canadian economy not to rest, but certainly make them a little bit less intense,” he added.

The Canadian dollar strengthened after the jobs gain, touching 1.3032 to the U.S. dollar, or 76.73 cents U.S.

The Bank of Canada has held its overnight interest rate steady since October 2018 even as several of its counterparts, including the U.S. Federal Reserve, have eased. The central bank’s next interest rate decision is set for Jan 22.

Addressing a business audience on Thursday in Vancouver, Bank of Canada Governor Stephen Poloz said the central bank would be watching to see if the recent slowdown in job creation persisted.

“I think (Poloz) will be pleased to see that rebound in jobs numbers in December,” said Josh Nye, a senior economist with RBC.

Full-time employment, Statistics Canada said on Friday, increased by 38,400 net positions, while part-time employment dropped by 3,200.

Meanwhile, Canada’s goods-producing industries gained 15,700 net jobs, mainly in construction. The services sector saw an increase of 19,400 net positions, largely in accommodation and food services.

Friday’s stronger-than expected jobs report follows a recent string of unimpressive domestic data analysts have said could point to the fourth-quarter annualized economic growth coming in below the central bank’s 1.3% forecast in October.

“I think (the Bank of Canada) will be relieved they didn’t get another negative,” said Benjamin Reitzes, Canadian rates and macro strategist at BMO Capital Markets. “There would be much more concern if you got three consecutive negative prints on the headline.”

Poloz said Thursday the most recent economic data had been mixed, telling reporters the fourth quarter had seen some unusual weather and strikes.