Canadian dollar closes at lowest level in a year

Fri Aug 8, 2008 5:00pm EDT
 
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By John McCrank

TORONTO (Reuters) - The Canadian dollar closed at its lowest level in nearly a year versus a rallying U.S. dollar on Friday after data showed Canada shed more jobs in July than at any other time since the recession in 1991.

Bond prices rallied as the weak jobs data raised the odds the Bank of Canada will deliver at least one interest rate cut before the end of the year.

The Canadian dollar closed at C$1.0674 to the U.S. dollar, or 93.69 U.S. cents, down from C$1.0530 to the U.S. dollar, or 94.97 U.S. cents, at Thursday's close.

For the week, the currency closed down 3.8 percent. During the session, it hit a low of C$1.0696, its lowest level since August 17, 2007.

Most of the day's losses came at the open of the North American session after data showed Canada lost 55,000 jobs in July, far below expectations for a gain of 5,000 jobs.

The Canadian dollar had already been under pressure due to weakening commodity prices and a rallying greenback.

Canada is a major exporter of oil and other key commodities, many of which have seen sharp corrections in recent weeks.

While the Canadian dollar sold off well over 1 percent against the greenback, it could have been worse, said Shaun Osborne, chief currency strategist at TD Securities.   Continued...