C$ falls on jobs data, weak US$ supports

Fri Aug 10, 2012 4:34pm EDT
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By Jennifer Kwan

TORONTO (Reuters) - The Canadian dollar eked out a gain on Friday, reversing an earlier loss following unexpectedly weak domestic jobs numbers for July, which dimmed expectations the Bank of Canada would raise interest rates any time soon.

The Canadian currency sank to a session low of C$0.9970 against the U.S. dollar, or $1.0030, after data showed the economy lost 30,400 jobs in July in a third disappointing month for the labor market.

"I don't think the market ever fully believed in the Bank of Canada's fairly hawkish tone, but it certainly dampens expectations for rate hikes in Canada," said Camilla Sutton, chief currency strategist at Scotiabank.

But the currency clawed back from its weak point to end at C$0.9910, or $1.0091, a hair higher from its North American finish at C$0.9920 versus the U.S. currency, or $1.0081.

The currency rose around 1 percent for the week, its fifth straight weekly climb.

"What the price action today would indicate, in terms of the move lower in dollar/Canada, it would be based on some squaring of long dollar positions heading into the weekend. Nothing more, nothing less," said Jack Spitz, managing director of foreign exchange at National Bank Financial.

"Euro is still trading the range. Dollar/Canada is still holding above the calendar low, but the move today has served to counteract the negative implications of that miss we saw earlier today," he added, referring to the employment report.

The data showed net job losses resulted from the elimination of 51,600 part-time positions, which offset the 21,300 full-time jobs created, according to Statistics Canada data on Friday. There was little change in both public and private sector employment.   Continued...