The Canadian dollar strengthened to an eight-week high of 1.39 per USD as stronger-than-expected domestic employment data narrowed yield differentials between Canada and the US. Canadian employment rose by 75,100 jobs in July, far exceeding expectations for a 15,000 gain, while the unemployment rate fell to a two-year low of 6.4%. Meanwhile, the US economy unexpectedly shed jobs in July, and previous nonfarm payrolls were revised sharply lower. The stronger Canadian labor market raised the prospect of a BoC rate hike if energy prices remain elevated, while weaker US employment data reduced expectations of a Federal Reserve hike this year. Meanwhile, recent data suggests Canada’s economy expanded an annualized 3.4% in the second quarter. Well above the Bank of Canada’s expectation of a 2.5% growth rate.