Canadian dollar hits one-week low after jobs data, pares losses

Fri Jul 8, 2016 9:55am EDT
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By Alastair Sharp

TORONTO (Reuters) - The Canadian dollar on Friday weakened against its U.S. counterpart on Friday after data showed the domestic economy unexpectedly shed 700 jobs and U.S. employment growth surged in June.

Shortly after the release of the data, the Canadian dollar CAD=D4 hit its lowest level since June 28 at C$1.3082 to the greenback, or 76.44 U.S. cents.

It then trimmed losses to trade at C$1.3022, or 76.79 U.S. cents at 9:40 a.m. EDT (1340 GMT), compared with Thursday's official Bank of Canada close of C$1.3003, or 76.91 U.S. cents.

While the Canadian jobs report was weaker than expected, the move in the currency pair likely had more to do with the increase in U.S. hiring, economists said.

"I would say the Canadian number is neither here nor there," said Doug Porter, chief economist at BMO Capital Markets. "It's probably on balance slightly softer than expected but the U.S. number is considerably stronger than expected, and I think that would be the main weight on the Canadian dollar today."

Canada lost 700 jobs when the market was expecting a 5,000 job increase, while the unemployment rate dipped as less people sought work, Statistics Canada said.

U.S. non-farm payrolls rose by 287,000 jobs last month, the largest gain since last October, the U.S. Labor Department said. May's payroll count was revised down to only 11,000 from the previously reported 38,000.

The loonie, as Canada's currency is colloquially known, was weaker against a string of other currencies too.   Continued...

Newly pressed Canadian one dollar coins, also know as loonies, at the Royal Canadian Mint in Winnipeg November 14, 2007. REUTERS/Fred Greenslade