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Canadian Dollar Hits 2-Week High as Jobs Report Revised

Canada’s dollar touched its highest level in more than two weeks as a corrected government report showed employers added more jobs than forecast last month, easing concern that the economic expansion is faltering.

The currency pared gains after the Ukraine said its troops destroyed Russian armed vehicles that crossed the border, prompting traders to seek a refuge in currencies such the U.S. dollar. Statistics Canada said 41,700 positions were added in July, after retracting incorrect figures from a week ago that showed a gain of 200 jobs. The unemployment rate wasn’t affected by the correction, falling to 7.0 percent from 7.1 percent in June.

“We saw a positive reaction to a significantly upward revision to the employment numbers,” Blake Jespersen, managing director of foreign exchange in Toronto at Bank of Montreal, said in a phone interview. “The numbers were priced in the market ahead of time so that’s why you didn’t see a large reaction.”

The loonie, as the currency is nicknamed for the image of the aquatic bird on the C$1 coin, appreciated to as much as C$1.0861 per U.S. dollar before trading little changed at C$1.0897 at 5 p.m. in Toronto. It touched C$1.0984 on Aug. 8, almost the weakest since May 5, after the government released the first report. One loonie buys 91.77 U.S. cents.

The yield on Canada’s benchmark 10-year bond fell four basis points, or 0.04 percentage point, to 2.02 percent and touched 1.99 percent, the lowest since May 2013. It is down from a 2014 high of 2.80 percent on Jan. 2.

Canadian Economy

Today’s report gave a fuller explanation of what caused the Aug. 12 retraction. Staff failed to run a program that is part of a scheduled update to the survey, leaving uncounted workers who should have been classified as full-time employees.

The revisions reduced the full-time job loss to 18,100 from 59,700, as Canada’s economy added 60,000 part-time jobs. The gains were led by 46,100 new jobs in education and 17,100 in information, culture and recreation workers, Statistics Canada said.

“A lot of the jobs created were part-time, and there were significant boosts from items that aren’t really indicative of broader economic strength,” David Doyle, a strategist at Macquarie Capital Markets in Toronto, said in a telephone interview.

Canada lost 52,300 jobs between the second quarter and the first, compared to a gain of 87,000 in the previous two periods.

Labor Participation

The participation rate remained unchanged from the previous month at 66.1 percent, matching a forecast in a survey of economists by Bloomberg News. Bank of Canada policy makers cited weaker participation in the labor market as a sign of slack in the economy, which they said last month will take about two years to eliminate.

The jobs number “looks a lot stronger from a headline perspective than what the details would suggest,” Doyle said.

Canada’s dollar has swung this year between a five-year low and a six-month high as investor speculation fluctuated on when the central bank might raise the benchmark interest rate, which it has held at 1 percent since 2010 to support the economy.

The loonie fell below its 200-day moving average, at C$1.0866, as Ukraine said its troops attacked an armed convoy that had crossed the border from Russian territory. A spokesman for Russia’s defense ministry denied the report.

“We are seeing risk assets underperform and that is what is causing the Canadian dollar to move higher,” Martin Schwerdtfeger, a currency strategist at Toronto-Dominion Bank’s TD Securities unit in Toronto, said in a phone interview.

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