Canadian dollar slides on soft U.S. data, Europe

Thu Apr 19, 2012 12:07pm EDT
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By Jon Cook

TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday after soft U.S. economic data suggested a slowdown in the economy of Canada's largest trading partner and ongoing euro zone worries weighed on risk sentiment.

Data from the U.S. on Thursday showed initial claims for state unemployment benefits edged down to a seasonally adjusted 386,000, below the median estimate from a Reuters poll of economists that had forecast claims falling to 370,000.

The four-week moving average for new claims, considered a better measure of labor market trends, rose 5,500 to 374,750.

"The U.S. jobs number definitely provided the market with some impetus to get into a slight risk aversion," said John Curran, senior vice president at CanadianForex.

Housing data on Thursday also raised doubts about the strength of the American recovery, with home resales falling in March. However, the data also revealed the supply of properties on the market tightened and prices inched higher.

At 10:18 a.m. EDT (1418 GMT), the Canadian dollar was at C$0.9945 against the U.S. dollar, or $1.0054, down from Wednesday's finish at C$0.9913 against the U.S. dollar, or $1.0088.

France and Spain sold all the bonds they wanted at auction on Thursday, though for Spain the cost was higher yields, indicating growing concerns the government will not be able to tame its deficit.

Also weighing were rumors that France's sovereign rating may be downgraded further and a survey that showed euro zone consumer confidence fell in April after three months of gains.   Continued...