Lower oil, weak domestic data weigh on C$

Fri Dec 4, 2015 4:39pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Alastair Sharp

TORONTO (Reuters) - The Canadian dollar weakened against the U.S. dollar on Friday after contrasting U.S. and Canadian employment data, while crude oil fell as OPEC maintains its policy of pumping near-record volumes of oil despite a supply glut.

But the limited nature of the weakening and apparent rejection of a move above C$1.34 confounded market participants who said the day's developments suggested a steeper loss was deserved for the loonie.

"Combine the jobs number with crude being at $40 you would think the Canadian dollar should be weaker," said David Bradley, director of foreign exchange trading at Scotiabank.

Canada shed more jobs than expected in November, while exports tumbled in October, suggesting the economy was off to a weak start in the final quarter of 2015 after just recently emerging from a mild recession.

Meanwhile, a sturdy increase in U.S. employment most likely paved the way for the Federal Reserve to raise interest rates this month for the first time in nearly a decade.

To top it off, prices for crude oil, a major Canadian export, fell after news the Organization of the Petroleum Exporting Countries planned to maintain its production near record highs despite depressed prices, as the producer group continued to guard its share of an oversupplied market.

The Canadian dollar CAD=D4 ended the day trading at C$1.3377 to the greenback, or 74.76 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$1.3318, while it hit its weakest in 11 days at C$1.3416 soon after the twin jobs reports came out before quickly paring those losses.   Continued...

Canadian Loonies, otherwise known as a one dollar coin, are displayed on top of an American currency in this posed photograph in Toronto, October 10, 2008.  REUTERS/Mark Blinch