REFILE-CANADA FX DEBT-C$ slides to two-week low on jobs data

Fri Feb 6, 2009 8:07am EST
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(Refiles to show C$ closed at C$1.2310 on Thursday, not Wednesday)

* Canada Jan employment -129K, worst job loss on record

* Unemployment rate rises to 7.2 pct from 6.6 pct in Dec

* Market looks to U.S. jobs figures at 8:30 a.m.

TORONTO, Feb 6 (Reuters) - The Canadian dollar tumbled past C$1.2500 to the U.S. dollar, or 80 U.S. cents, on Friday after a report showing the biggest monthly job loss ever recorded in the survey by Statistics Canada.

The dollar fell from levels around C$1.2415, or 80.55 U.S. cents, just before the release of the report. It had closed at C$1.2310, or 81.23 U.S. cents, on Thursday.

The dollar at one point hit C$1.2540, or 79.74 U.S. cents, its weakest level since Jan. 23.

"As we go through the U.S. payroll data I think the market will look to buy pullbacks toward the C$1.2430 area and the risk is that we'll see dollar/Canada move up to C$1.2650 as we move into next week," said George Davis, director and chief FX technical analyst, RBC Capital Markets.

Canada suffered its worst job losses in over three decades in January as the recession forced employers to cut a record 129,000 workers and pushed the unemployment rate to 7.2 percent from 6.6 percent in December. [ID:nN06253705]

"The details are actually worse than the headline print, which often isn't the case when you get such an astounding headline," said Derek Holt, an economist with Scotia Capital.

The market now turns to the U.S. payroll data at 0830/1330, which is expected to add to the gloom with analysts forecasting 525,000 jobs lost in January. (Reporting by Ka Yan Ng; Editing by Jeffrey Hodgson)