Canadian dollar closes lower amid strong Canadian, U.S. jobs reports
TORONTO - The Canadian dollar closed lower Friday in the wake of strong employment data from Canada and the U.S.
The loonie was down 0.14 of a cent at 93.84 cents US as Statistics Canada reported that the economy created 21,600 jobs last month, almost double the 12,000 that economists had expected. The jobless rate held steady at 6.9 per cent for a third month.
The Canadian currency had initially tumbled as low as 93.39 cents US while the U.S. greenback advanced and bond yields ran ahead after the U.S. Labor Department reported that 203,000 jobs were created during November. Economists had expected a gain of around 180,000.
The benchmark 10-year U.S. Treasury moved up to 2.91 per cent in the wake of the report, but later backed off to 2.86 per cent by late afternoon.
The U.S. employment report left intact concerns over whether the Federal Reserve will start to cut back on a key stimulus measure sooner than expected.
Markets are braced for the Fed to cut back on its US$85 billion of monthly bond purchases but hopes have been high that the Fed wouldn't move until at least March, when incoming chair Janet Yellen is settled in the job and the central bank would be more confident about steady improvement.
But a string of positive data have raised concerns that the central bank could act as soon its next meeting, Dec. 18.
On the commodity markets, the January crude contract on the New York Mercantile Exchange slipped gained 27 cents to US$97.65 a barrel.
March copper gained two cents to US$3.25 while February bullion faded $2.90 to US$1,229 an ounce.
Elsewhere on the economic front, Germanyâ€™s central bank lifted its growth forecast for the countryâ€™s economy this year and next, pointing to healthy domestic demand as unemployment remains low.
The Bundesbank predicts that the economy, Europeâ€™s biggest, will grow by 0.5 per cent this year and 1.7 per cent in 2014.
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