Canadian dollar ends winning week on a lower note

Fri Apr 4, 2008 6:42pm EDT
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By Frank Pingue

TORONTO (Reuters) - The Canadian dollar closed lower versus the U.S. dollar on Friday as data showed job growth moderated in Canada in March after two solid months, but the currency still ended the week with a 1.2 percent gain.

Canadian bond prices finished higher across the curve as the jobs report was followed by U.S. jobs data that persuaded many investors that more aggressive interest rate cuts in the United States will be needed to stimulate the economy.

The Canadian dollar closed at C$1.0093 to the U.S. dollar, or 99.07 U.S. cents, down from C$1.0044 to the U.S. dollar, or 99.56 U.S. cents, at Thursday's close.

At one point in the session the Canadian currency fell to C$1.0101 to the U.S. dollar, or 99.00 U.S. cents, but three successive days of rises heading into the week's final session proved enough to insure that it rose for a second straight week.

Details of the Canadian March jobs report signaled a softening jobs market and slowing economy, which supported calls for another Bank of Canada rate cut when the bank next sets interest rates on April 22.

"The jobs report came in close to expectations but the underlying details were even weaker with all of the strength being in part-time jobs and full-time jobs actually declining and offsetting part of that number," said David Powell, currency analyst at IDEAglobal in New York.

"We just had some further signs of a story that we already knew about in Canada. The economy is weakening and the Bank of Canada is going to continue to cut rates and that weighed on the Canadian dollar."

The Bank of Canada has cut its overnight lending rate by 100 basis since December to 3.50 percent, which narrowed the gap with the U.S. Federal Reserve's 2.25 percent rate.   Continued...