C$ weakens vs dollar on contrasting jobs data, lower oil

Fri Dec 4, 2015 10:39am EST
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By Fergal Smith

TORONTO (Reuters) - The Canadian dollar weakened against the U.S. dollar Friday after contrasting U.S. and Canadian employment data, while crude oil fell as OPEC sources said the group would likely maintain their policy of pumping near-record volumes of oil.

Canada shed 35,700 jobs in November, handily exceeding economists' forecasts for a loss of 10,000 jobs and erasing the temporary boost the labor market had seen from October's federal election.

Slightly stronger than expected U.S. employment numbers indicated the Fed is likely going to start tightening later this month, according to Paul Ferley, assistant chief economist at Royal Bank of Canada, contributing "to further weakening in the Canadian dollar."

At 9:38 a.m. EST (1438 GMT), the Canadian dollar CAD=D4 was trading at C$1.3374 to the greenback, or 74.77 U.S. cents, weaker than Thursday's close of C$1.3338, or 74.97 U.S. cents.

The currency's strongest level of the session was C$1.3320, while it hit its weakest in 11 days at C$1.3416.

Oil prices fell after OPEC sources said the group, whose ministers were meeting in Vienna, planned to keep pumping oil at near-record levels, even as a global crude glut has depressed prices.

Also weighing on the Canadian dollar, Canada's trade deficit unexpectedly jumped to C$2.76 billion ($2.08 billion) in October as exports to the U.S. dropped by the most in almost 2-1/2 years.

Canadian government bond prices were mixed across the maturity curve, after having sold off on Thursday in sympathy with German Bunds after European Central Bank easing was less aggressive than some investors expected.   Continued...

The Canadian five and 10 dollar bills, made of polymer, are displayed following an unveiling ceremony at the Bank of Canada in Ottawa April 30, 2013.     REUTERS/Chris Wattie