The Canadian dollar rose as a gain in full-time employment in April partially offset the biggest drop in part-time jobs in four years, adding to optimism the economy is recovering from a plunge in oil prices, its largest export.
The currency strengthened against most of its major peers as employers filled 46,900 full-time positions while cutting 66,500 part-time jobs, for a net loss of 19,700. Bank of Canada Governor Stephen Poloz raised the bank’s growth forecasts last month for the second and third quarters, saying growth would quickly bounce back after an expected first-quarter stall.
“The economy is absorbing the layoffs in the oil sector,” Jack Spitz, managing director of foreign exchange at National Bank of Canada, said by phone from Toronto. “The Canadian dolalr rallied on the back of that data.”
The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, rose 0.4 percent to C$1.2079 per U.S. dollar at 9:33 a.m. in Toronto. The currency touched C$1.1941 on May 6, the highest level since Jan 20. One loonie buys 82.78 U.S. cents.
The U.S. dollar is down against most of its major peers today after a report showed the U.S. added fewer jobs than forecast for a second consecutive month, adding to speculation a weakening economy will prompt the Federal Reserve to keep interest rates low for longer.
April’s net-job losses were worse than economists’ median forecast for a 5,000 position decline in a Bloomberg survey. Payrolls swelled by 28,700 positions the previous month. The unemployment rate held at 6.8 percent for the third straight month, compared with a forecast for it to rise to 6.9 percent.
A supply glut drove prices for the North American benchmark of crude oil to a six-year low in March. Prices have since rebounded as producers scaled back.
Suncor Energy Inc., Canada’s largest oil company, Cenovus Energy Inc. and other oil producers have already eliminated thousands of jobs this year, and the government expects 31,800 more jobs will be lost in the remainder of the year.
The Bank of Canada left its benchmark interest rate unchanged April 15 at 0.75 percent, saying its 25 basis point cut in January was enough to stimulate growth. The bank cut its first quarter growth forecast to zero in an accompanying report, while raising the second quarter projection to 1.8 percent, and the following quarter’s forecast to 2.8 percent.