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Canada’s Dollar Advances Versus Major Peers After U.S. Adds Jobs

Canada’s dollar rose versus most of its major counterparts after payrolls increased more than forecast in the U.S., the nation’s biggest trade partner.

The currency, nicknamed the loonie for the image of the waterfowl on the C$1 coin, advanced even after Canadian jobs growth slowed more than projected. The loonie touched the strongest level versus the U.S. dollar in more than a week before trimming gains as commodities and stocks fell.

“We’ve got mixed forces at play, where domestically the news was soft and internationally we’ve had U.S.-driven strength,” Audrey Childe-Freeman, head foreign-exchange strategist at Bank of Montreal in London, said in a phone interview. “The Canadian dollar trades very much as a function of international factors -- in particular U.S. data -- so if the U.S. economy does well, Canada will benefit.”

The Canadian currency appreciated less than 0.1 percent to 99.58 cents per U.S. dollar at 5 p.m. in Toronto and reached 99.22 cents, the strongest level since Oct. 25. It advanced 0.1 percent since Oct. 26, the first weekly gain since Oct. 5. It touched C$1.0019 on Oct. 30, the weakest since August. One Canadian dollar buys $1.0042. The currency traded weaker than parity with the greenback over the past four days.

The loonie strengthened 1 percent to C$1.2777 per euro.

Canada’s dollar has gained 1.1 percent this year against nine developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The greenback has lost 1.7 percent, while the yen and euro are the biggest losers, dropping 6.5 percent and 2.8 percent.

Government Bonds

The nation’s 10-year government bonds erased a decline and pushing the yield down two basis points, or 0.02 percentage point, to 1.77 percent. The yield rose earlier to 1.82 percent. The price of the 2.75 percent debt due in June 2022 increased 16 cents to C$108.60.

Oil, Canada’s largest export, sank amid bets shutdowns of U.S. East Coast refineries because of Hurricane Sandy will add to already-ample stockpiles. Crude oil for December delivery tumbled as much as 2.8 percent to $84.66 a barrel in New York, matching the lowest level since July. Standard & Poor’s GSCI Index of 24 raw materials slid 2 percent. Raw materials including oil account for about half of Canada’s export revenue.

The S&P 500 Index declined 0.9 percent as Americans prepared to pick a president next week and assessed damage from Hurricane Sandy. It rose 0.5 percent earlier.

U.S. Jobs

The last U.S. jobs report before the presidential election on Nov. 6 showed a net 171,000 workers were added to payrolls in October after a 148,000 gain in September that was more than first estimated. The Labor Department figures issued the data today in Washington. The median forecast of 91 economists surveyed by Bloomberg called for an increase of 125,000. The U.S. jobless rate rose to 7.9 percent from 7.8 percent as more people entered the labor force.

Canadian employment rose last month by 1,800 jobs, following September’s 52,100 gain, Statistics Canada said today in Ottawa. Gains in public-sector work were curbed by a decline in agriculture. Economists surveyed by Bloomberg News projected job creation of 10,000, according to median of 23 forecasts. Canadian payrolls added 34,300 jobs in August.

The nation’s jobless rate remained at 7.4 percent.

“People will expect some sort of knock-on effect from job growth in the U.S., which, while it was moderate, is certainly on the plus side of the ledger,” said Dean Popplewell, head analyst in Toronto at the online currency-trading firm Oanda Corp. “Canada certainly disappointed.”

Tepid Expansion

The Canadian report was the second this week signaling a tepid economic expansion toward the end of the year. The nation’s statistics agency said two days ago gross domestic product shrank in August for the first time in six months on mining maintenance shutdowns and lower factory production. Finance Minister Jim Flaherty cut economic growth and revenue projections this week on signs of global weakness.

“Following two consecutive months of robust job gains, the Canadian labor market took a breather in October,” David Tulk, chief macro strategist at Toronto-Dominion Bank’s TD securities unit in Toronto, wrote in a note to clients. “After a frontloaded recovery, the underlying pace of hiring is expected to slow amid international headwinds and domestic fatigue.”

Between 10,000 and 20,000 jobs will be added each month for the remainder of the year and into 2013, he said.

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