Major misses on employment send Canadian dollar tumbling half a cent | iNFOnews | Thompson-Okanagan's News Source

Current Conditions


Major misses on employment send Canadian dollar tumbling half a cent

A Canadian dollar coin, or loonie, and an American dollar sit in front of a scale in Quebec City, in this April 7, 2010 photo. THE CANADIAN PRESS/Jacques Boissinot
January 10, 2014 - 6:04 AM

TORONTO - The Canadian dollar dropped sharply Friday, falling well below the 92-cent US threshold amid major disappointments on Canadian and U.S. jobs data.

The loonie fell 0.5 of a cent to 91.65 cents US, its lowest level since September 2009, after Statistics Canada reported that the economy shed 45,900 jobs last month, a major miss as economists had expected that the economy created about 14,600 jobs. The jobless rate came in at 7.2 per cent, up from 6.9 per cent in November.

And in the U.S., the Labor Department said the economy cranked out only 74,000 jobs as opposed to the 200,000 level that economists had forecast.

Expectations had been ratcheted up after payroll firm ADP reported Wednesday that the private sector alone created 238,000 jobs last month, while other data Thursday showed a continuing decline in those filing for jobless benefits. Economists had 0expected the economy to have created a total of 200,000 jobs last month, following a 195,000 print the previous month.

Traders hoped that the U.S. jobs data will provide some direction on how the U.S. Federal Reserve plans to proceed on further tapering to its massive monthly bond purchases. The key stimulus program was cut last month from $85 billion a month to $75 billion, making further cuts contingent on economic performance, particularly the job market.

It's been a brutal week for the loonie, which has fallen more than two cents US since last Friday, buffetted by data that showed Canada's trade deficit grew last fall. Another report showed the U.S. trade deficit dropped 12.9 per cent in November to its lowest level in four years. Imports, including Canadian crude oil, dropped 1.4 per cent.

And the Bank of Canada has turned dovish on interest rates with a hike not expected until next year.

Also, the U.S. dollar has strengthened on speculation about how fast the U.S. Federal Reserve might reduce its massive bond buying program.

Commodity prices were higher with the February crude contract on the New York Mercantile Exchange ahead 88 cents to US$92.84 a barrel.

March copper gained four cents to US$3.34 a pound while February bullion rose $10.80 to US$1,240.20 an ounce.

News from © The Canadian Press, 2014
The Canadian Press

  • Popular kelowna News
View Site in: Desktop | Mobile