Loonie tumbles on poor job numbers

Photo: The Canadian Press. All rights reserved.

Canadian dollars (loonies) are pictured in Vancouver, Sept. 22, 2011. THE CANADIAN PRESS/Jonathan Hayward

The Canadian dollar fell more than a US cent Friday morning as job creation numbers for Canada and the United States missed by a wide margin.

The loonie tumbled 1.03 cents to 97.75 cents US after Statistics Canada reported the economy shed 55,000 jobs -- all full time -- in March. The unemployment rate rose by 0.2 per cent to 7.2 per cent.

Generally speaking, economists had expected about 6,500 jobs to have been created last month, although BMO Capital Markets had suggested it could be as many as 18,000.

The dollar was also punished by other data that showed a big increase in Canada's trade deficit with the rest of the world.

In the U.S., the Labour Department reported that the economy only managed to crank out 88,000 jobs last month even as the jobless rate declined 0.01 per cent to 7.6 per cent.

Traders had started the week off expecting that the U.S. non-farm payrolls report would show that about 190,000 jobs were produced in March following a reading of 220,000 in February.

But that was before the release of data over the past few days showing slower than expected expansion in both the manufacturing and service sectors, capped off with a report from payroll firm ADP that the economy created fewer than expected jobs in the private sector.

Meanwhile, Statistics Canada said the trade deficit widened from $746 million in January to $1 billion in February.

Exports decreased 0.6 per cent to $38.5 billion, with shipments of metal and non-metallic mineral products contributing the most to the decline. The agency said that this was partially offset by an increase in motor vehicles and parts.