Loonie jumps almost a cent, U.S. jobs data raises questions about Fed tapering
Sep 6, 2013 / 5:54 am
TORONTO - The Canadian dollar spiked almost a full US cent amid jobs data released in Canada and the U.S.
The loonie jumped 0.92 of a cent to 96.1 cents US as Statistics Canada reported that the economy created 59,000 positions last month. But the growth was mainly for part-time employment. The unemployment rate fell to 7.1 per cent in August, from 7.2 per cent the previous month.
The loonie spiked because the American dollar backed off after the U.S. Labor Department reported jobs growth of 169,000 last month, narrowly missing expectations of about 175,000 jobs.
The greenback fell back as doubts emerged about whether the U.S. Federal Reserve will start to wind up a key stimulus measure.
The Fed has indicated it could start winding up its US$85 billion of bond purchases as early as this month if the economy shows sufficient strength. The prospect of the Fed tapering those asset purchases has unnerved some investors as the stimulus has kept rates low and channelled money into equity markets around the globe.
Meanwhile, jitters remained over Syriaâ€™s civil war and whether the U.S. would launch a punitive strike against President Bashar Assadâ€™s regime for a chemical attack against civilians in suburban Damascus last month. But at the G-20 summit of world leaders in Russia this week, President Barack Obama failed to garner much support for military intervention.
A congressional vote on such a strike could take place as early as next week.
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