Canadian dollar remains weaker after Canadian jobs data

Fri Jun 8, 2012 9:55am EDT
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By Allison Martell

TORONTO (Reuters) - Canada's dollar weakened against the U.S. currency on Friday, hurt by fears about global growth and Europe's debt crisis, with data showing the Canadian economy created fewer jobs than expected and a surprise trade deficit signaling tepid domestic demand.

Canada's unemployment rate held steady in May as the economy created a negligible 7,700 jobs, snapping a two-month hiring spree that yielded the biggest employment gains in three decades.

"While the details are slightly disappointing, the fact that Canada is still churning out job gains is the big story here, so I don't see why this would have any lasting impact on the Canadian dollar," said Doug Porter, deputy chief economist at BMO Capital Markets.

Porter said he thought the one month of data would not affect the longer-term outlook for the Bank of Canada's monetary policy.

Trade data released with the jobs number did nothing to support the currency. The report showed a surprise trade deficit, Canada's first in six months.

Following the data releases, the currency briefly touched a session low of C$1.0358.

But by 9:48 a.m. EDT (1348 GMT) it was trading at C$1.0337, or 96.74 U.S. cents, compared with around C$1.0339 heading into the report.

The currency was weaker than Thursday's close at C$1.0279 or 97.29 U.S. cents.   Continued...