Canadian Dollar Falls to Six-Year Low as Economy Loses JobsAri Altstedter and Cecile Gutscher
The Canadian dollar weakened to the lowest level in six years after a report showed the economy lost jobs in February as the impact of an oil price shock trimmed the Alberta labor force.
Nationwide employment fell by 1,000 positions due to losses in part time work even as full-time positions were added. The jobless rate rose to 6.8 percent, the highest since September, from 6.6 percent in January, Statistics Canada said. Economists surveyed by Bloomberg News expected a decline of 5,000 jobs and a 6.7 percent jobless rate.
“It feeds into the idea that we’re just seeing the beginning of the impact of lower oil prices,” Greg Moore, senior currency strategist at Royal Bank of Canada, said by phone from Toronto. “Goods producing jobs, both in natural resources and manufacturing, probably related to natural resources, were down.”
The loonie, as the currency is known for the image of the aquatic bird on the C$1 coin, weakened as much as 1 percent to C$1.2818 per U.S. dollar, the least since March 2009. It traded at C$1.2783 at 5 p.m. in Toronto.
Hedge funds and other large speculators increased bets against the loonie for the third straight week, according to data today from the Washington-based Commodity Futures Trading Commission. Bets for the currency to fall against its U.S. peer now outnumber those in its favor by 39,030 contracts as of March 10, the most net-shorts in almost a year, the data show.
The price of crude oil, Canada’s largest export, is trading at less than half its peak last year, which prompted the Bank of Canada to unexpectedly cut its benchmark interest rate to 0.75 percent from 1 percent in January.
Today’s jobs data suggest the effects of falling oil prices are beginning to show up in the nation’s employment market. Jobs in the natural resource sector were down 16,900 last month. Alberta, home to the bulk of Canada’s proven oil reserves, posted a 14,000 decline in employment and its highest jobless rate since 2011, rising 0.8 percentage points to 5.3 percent.
By industry, the biggest decline nationally was the 19,900 positions lost in manufacturing, followed by the natural resource sector.
Across the country, part-time positions fell by 34,900 in February, while full-time employment increased by 34,000.