Canada dollar stumbles; eyes on Canada jobs data

Thu May 10, 2012 4:40pm EDT
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By Jennifer Kwan

TORONTO (Reuters) - Canada's dollar was little changed against its U.S. counterpart on Thursday and traded in a narrow range as the market looked ahead to a key domestic jobs report for more signs on the state of the economic recovery.

The currency's performance was largely muted compared to a selloff in the previous session. It was seen pressured by ongoing worries about the stability of the euro zone, most recently with Greece's political impasse, but it was also supported by a modest advance in global equities after recent weakness and better U.S. jobs data..N

New U.S. claims for unemployment benefits edged downward last week, according to government data on Thursday, which could ease concerns the labor market was deteriorating after April's weak employment growth.

"Even the tiny improvement in initial jobless claims is encouraging especially given the mediocre employment report we saw for the U.S. in April," said Doug Porter, deputy chief economist at BMO Capital Markets.

"There was a sense that the U.S. economy was struggling again and to see any improvement in the jobs front is a check mark in the plus column," he said.

All that helped the Canadian currency climb as high as C$0.9977 versus the U.S. dollar, or $1.0023. The currency finished the session at C$1.0017 versus the U.S. dollar, or 99.83 U.S. cents, down slightly from Wednesday's finish at C$1.0009 against the U.S. dollar, or 99.91 U.S. cents.

The focus going forward is Friday's Canadian employment data, said Charles St-Arnaud, economist and currency strategist at Nomura Securities in New York.

Canada will be fortunate if it registered much of an employment increase in April after March's outsized gain of 82,300 jobs, according to a Reuters poll of analysts.   Continued...