CANADA FX DEBT-C$ sharply weaker on grim employment data

Fri Apr 5, 2013 9:27am EDT
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* C$ at C$1.0202, or 98.02 U.S. cents

* Canadian, U.S. jobs data far weaker than expected

* Markets may start to speculate on Bank of Canada easing

By Andrea Hopkins

TORONTO, April 5 (Reuters) - The Canadian dollar weakened to a nearly two-week low against its U.S. counterpart on Friday after both U.S. and Canadian employment data came in far weaker than expected, erasing a short-lived rally by the currency to 6-week highs.

The Canadian currency fell to C$1.0220 to the U.S. dollar, or 97.85 U.S. cents, after data showed Canada unexpectedly lost jobs in March and U.S. employers added far fewer jobs than expected, raising fears that the North American economic recovery was not as robust as previously thought.

Canada's economy shed 54,500 jobs in March, more than wiping out the previous month's big gain and pushing up the jobless rate to 7.2 percent from 7.0 percent, Statistics Canada data indicated on Friday. Market analysts had forecast an increase of 8,500 jobs.

The U.S. job market was little better. U.S. employers added just 88,000 positions last month, the slowest pace in nine months, well below the 200,000 gain expected by analysts polled by Reuters. The data was seen as a sign that Washington's austerity drive could be stealing momentum from the economy.

Canadian trade data also disappointed. Lower exports and slightly higher imports pushed Canada's trade deficit in February up to C$1.02 billion ($1.01 billion) from a revised shortfall of C$746 million in January.   Continued...