Canadian Dollar Weakens as Job Losses Contrast Hiring in U.S.by
Loonie falls toward two-month low as trade gap widens
Strong U.S. hiring boosts case for higher U.S. interest rates
The Canadian dollar fell as the country lost more jobs than forecast in November while payrolls in the U.S. exceeded projections, bolstering speculation Canada’s economy is being left behind by its largest trading partner.
The currency also weakened against most major peers as crude oil prices fell as much as 2.2 percent after the Organization of Petroleum Exporting Countries was said to raise its production ceiling. The increased production would add to a glut that has driven prices for crude, Canada’s largest export until this year, down by half from a year ago.
"Growth may have stumbled into the fourth quarter quite badly," Shaun Osborne, chief foreign-exchange strategist at Bank of Nova Scotia, by phone from Toronto. "The contrast between better-than-expected U.S. data, worse-than-expected Canadian numbers overall,should mean a weaker Canadian dollar."
The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, fell as much a s 0.3 percent before trading at C$1.3364 per U.S. dollar at 9:54 a.m. in Toronto. One loonie buys 74.83 U.S. cents.
Canada’s jobs report and a separate one showing a wider than expected trade deficit contrasted with better than expected job growth in the U.S. that bolstered the case for the Federal Reserve to raise interest rates there when it meets in two weeks. The market assigned probability of a rate cut in Canada meanwhile inched up after the data.
The nation’s employment declined by 35,700 and the unemployment rate rose to 7.1 percent from 7.0 percent, Statistics Canada said. Economists surveyed by Bloomberg News projected a 10,000 job decrease and an unchanged jobless rate, according to the median forecasts.
Canada’s merchandise trade deficit widened in October as exports fell for a third straight month, approaching the record C$3.6 billion set in March, as the value of oil shipments drops. At the same time, manufacturers have been slow to take advantage of a weaker currency and a U.S. recovery.