CANADA FX DEBT-C$ weaker after domestic jobs data

Fri Jun 5, 2009 8:01am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Jennifer Kwan

TORONTO, June 5 (Reuters) - The Canadian dollar was weaker against the U.S. currency on Friday after government data showed Canada lost about 42,000 jobs in May and the unemployment rate surged to an 11-year high.

The Canadian dollar CAD= CAD=D3 weakened slightly to around C$1.1033 to the U.S. dollar, or 90.64 U.S. cents, from around C$1.1022, or 90.73 U.S. cents, in the minutes before the data's release.

At 7:39 a.m. (1139 GMT), the Canadian unit had recovered to C$1.1019 to the U.S. dollar, or 90.75 U.S. cents. This was still down from C$1.0968 to the U.S. dollar, or 91.17 U.S. cents, at Thursday's close.

Statistics Canada said on Friday the net job losses in May totaled 41,800 and the unemployment rate jumped to 8.4 percent from 8.0 percent in April, as the worst recession since World War Two led to massive lay-offs in the factories of Ontario, once the country's manufacturing powerhouse. [ID:nN05253705]

The data was worse than expected and comes as an unprecedented rally in the Canadian dollar hammers manufacturers.

Analysts surveyed by Reuters had predicted employers would drop 33,000 staff from payrolls and the jobless rate would rise to 8.2 percent.

"I assume it's slightly Canadian dollar negative to the degree that the numbers were technically worse than expected," said Eric Lascelles, chief economics and rates strategist with TD Securities.

"For the Bank of Canada, I don't know if there's anything all that profound. Anyone was dreaming in Technicolor if they thought we were going to continue to see 36,000 job gains on a monthly basis. The realist would have expected a return back to this sort of outcome."   Continued...