CANADA FX DEBT-C$ hit by bleak economic outlook, weaker oil

Fri Jan 9, 2009 5:22pm EST
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* Big Canada, U.S. job losses add to economic gloom

* Dismal outlook drags oil price down 2 percent

* Bonds push higher as equities retreat

By Jennifer Kwan

TORONTO, Jan 9 (Reuters) - The Canadian dollar weakened against the U.S. currency on Friday as dismal economic data from both sides of the border underscored the severity of the global downturn and helped drag down the price of crude.

The Canadian currency closed at C$1.1908 to the U.S. dollar, or 83.98 U.S. cents, down from C$1.1785 to the U.S. dollar, or 84.85 U.S. cents, on Thursday.

Bond prices were higher across the curve as the gloomy employment data drew investors to safe-haven government debt.

Data showed the Canadian economy shed 34,400 jobs in December while the unemployment rate rose to 6.6 percent. Both figures were slightly worse than forecasts in a Reuters poll for job losses of 22,000 and an unemployment rate of 6.5 percent. [ID:nN09253705]

More grim were U.S. figures that showed employers chopped payrolls by 524,000 in December, pushing the unemployment rate to its highest level in almost 16 years, adding to worries over the outlook for U.S. economy. [ID:nN09282664]   Continued...