Loonie slides despite strong November jobs report, greenback up on U.S. data - InfoNews

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Loonie slides despite strong November jobs report, greenback up on U.S. data

Canadian dollars, or loonies, sits on their American counterparts on Sept. 20, 2007 in Montreal. THE CANADIAN PRESS/Paul Chiasson
December 06, 2013 - 5:47 AM

TORONTO - The Canadian dollar was sharply lower Friday in the wake of strong employment data from Canada and the U.S.

The loonie was down 0.53 of a cent to 93.45 cents US as Statistics Canada reported the economy created 21,600 jobs last month, almost double the 12,000 that economists had expected. The jobless rate held steady at 6.9 per cent for a third month.

The Canadian currency slid while the U.S. greenback advanced and bond yields ran ahead after the U.S. Labor Department reported that 203,000 jobs were created during November, on top of a revised 200,000 in October. Economists had expected a gain of around 180,000.

The reading left intact concerns the Federal Reserve will start to cut back on a key stimulus measure sooner than expected.

Markets are braced for the Fed to cut back on its US$85 billion of monthly bond purchases but hopes have been high that the Fed wouldn't move until at least March, when incoming chair Janet Yellen is settled in the job and the central bank would be more confident about steady improvement. But a string of positive data has raised concerns the central bank could act as soon its next meeting, Dec. 18.

The benchmark 10-year U.S. Treasury moved up to 2.91 per cent in the wake of the report from 2.8 per cent earlier in the morning.

Traders will also take in data on U.S. consumer confidence during the morning.

On the commodity markets, the January crude contract on the New York Mercantile Exchange slipped 25 cents to US$97.13 a barrel.

March copper gained one cent to US$3.24 while December bullion declined $15.70 to US$1,216.20 an ounce.

Elsewhere on the economic front, Germany’s central bank lifted its growth forecast for the country’s economy this year and next, pointing to healthy domestic demand as unemployment remains low.

The Bundesbank predicts that the economy, Europe’s biggest, will grow by 0.5 per cent this year and 1.7 per cent in 2014.

News from © The Canadian Press, 2013
The Canadian Press

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