BLBG: Canada’s Dollar Declines to Two-Week Low as Employers Cut Jobs
By Chris Fournier and Michael J. Moore
Dec. 5 (Bloomberg) -- Canada’s dollar fell to a two-week low after a government report showed employers cut almost triple the jobs in November that economists forecast, signaling the country may be entering a recession.
“It’s obviously a weak number,” said Firas Askari, head currency trader in Toronto at BMO Nesbitt Burns, a unit of Bank of Montreal, Canada’s fourth-largest bank. “The Canadian dollar is obviously not immune to global weakness.” The loonie will strengthen to C$1.25 by year-end, Bank of Montreal forecasts.
The Canadian dollar dropped 0.9 percent to C$1.2871 per U.S. dollar at 7:17 a.m. in Toronto, from C$1.2757 yesterday. It touched $1.2880, the weakest level since Nov. 21. One Canadian dollar buys 77.70 U.S. cents.
The economy lost 70,600 jobs after a gain of 9,500 positions in October, Statistics Canada said today in Ottawa. The median forecast of 21 economists surveyed by Bloomberg News was for a decrease of 25,000 in November. Canada’s unemployment rate rose to 6.3 percent, from 6.2 percent.
Canada’s central bank cut borrowing costs six times beginning in December 2007, lowering its overnight rate to 2.25 percent from 4.5 percent. Policy makers will cut the target rate by a half-percentage point to 1.75 percent at their next meeting on Dec. 9, according to the median forecast in a separate Bloomberg survey.
To contact the reporters on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net; Michael J. Moore in New York at mmoore55@bloomberg.net
