Loonie falls amid weak Canadian jobs figures; unemployment rate stays at 7%
TORONTO - The Canadian dollar was slightly lower Friday, as Statistics Canada unexpectedly reported that 11,000 jobs were lost last month.
The loonie dipped 0.06 of a cent to 91.90 cents US.
Economists had been expecting the addition of 10,000 net jobs in August.
Rahim Madhavji of Knightsbridge Foreign Exchange said the numbers give the Bank of Canada another reason to stay with its neutral stance and keep interest rates lower for a while longer.
"The Bank of Canada has made it clear that inflation and the economy need to pick up before interest rates will be considered to move higher â€” this data doesn't help the Canadian dollar," Madhavji said in a note.
The Canadian central bank held its key overnight interest rate at one per cent this week and maintained its neutral stance on future rate changes.
The central bank noted that while exports are up, that growth will need to continue if it is to translate into more business investment and hiring.
Meanwhile, it was a similarly soft reading on job creation in the U.S.
The U.S. Labor Department reported that employers added just 142,000 jobs in August, ending a six-month streak of hiring above 200,000 and posting the smallest gain in eight months.
Economists had forecast that the U.S. economy would create about 220,000 jobs last month. The department said the unemployment rate fell to 6.1 per cent from 6.2 per cent, but the rate dropped because fewer Americans were working or seeking jobs.
August's job gains in the U.S. were far below the average monthly increase of 212,000 in the past 12 months.
The U.S. Federal Reserve has been carefully watching the release of the monthly job numbers, as a sign to see if the economy is improving at a good pace and when it can start raising interest rates.
On the commodity markets, the October crude contract on the New York Mercantile Exchange dipped $1.16 to US$93.29 a barrel. December bullion jumped 80 cents to US$1,267.30 an ounce, while December copper added two cents to US$3.17 a pound.
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