Canadian dollar stung by unexpectedly weak jobs data

By Frank Pingue

TORONTO (Reuters) - Canada's currency skidded to its lowest closing level in nearly a week on Friday, stung by U.S. and Canadian jobs data that fell short of estimates and left investors with a reduced appetite for riskier assets.

After reclaiming all of the post-jobs-data losses suffered during early stages of Friday's session, the Canadian currency ran into a fresh wave of selling heading into the close of the North American session.

"We've seen a pretty steady flow of Canadian dollar sellers today against the U.S. dollar and on some of the crosses," said Steve Butler, director of foreign exchange trading at Scotia Capital.

"The market has got to really come to grips with the fact that interest rates are going to be on hold for a long time."

The data was seen making it easier for the Bank of Canada to stick to its conditional pledge to hold its benchmark interest rate at a record low 0.25 percent until at least the end of June 2010.

The Canadian dollar was unloaded early in the session after data showed Canada lost 43,200 jobs in October, which was more than even the gloomiest analyst had predicted. ID:N06253705

It faced another bout of pressure when another piece of data released shortly after showed the U.S. unemployment rate unexpectedly rose to 10.2 percent in October.

U.S. data affects the Canadian currency as it offers insight into the strength of the U.S. economic recovery, which is critical to Canada because of the tight economic ties between the two countries.