BLBG:Canadian Dollar Drops for First Time in Seven Days After Job Loss Report
The Canadian dollar dropped for the first time in seven days after a government report showed employers unexpectedly reduced jobs in November.
The nation’s currency still registered its biggest five-day gain since October on a European proposal to channel loans through the International Monetary Fund and as central banks including the Bank of Canada acted Nov. 30 to make it cheaper for lenders to borrow in dollars.
“Jobs data disappointed in terms of the headline figure,” Stewart Hall, senior currency strategist at Royal Bank of Canada, said in a telephone interview from Toronto. “We’re left with the residue of earlier events from this week that put a bid into the risk story and by extension into the Canadian dollar.”
The loonie, as the currency is also known, depreciated 0.6 percent to C$1.0195 per U.S. dollar by 5 p.m. Toronto time after earlier gaining 0.6 percent. One Canadian dollar buys 98.09 U.S. cents.
The Canadian currency advanced 2.7 percent this week against the greenback, the most since a 2.9 percent climb in the five days ended Oct. 14. The loonie rose earlier today to C$1.0080, the strongest level since Nov. 14.
Canadian jobs fell by a net 18,600 last month, following October’s drop of 54,000, Statistics Canada said today in Ottawa. The unemployment rate rose for a second straight month, increasing to 7.4 percent from 7.3 percent.
October Jobs Report
The loonie slid 1.2 percent on Nov. 4 after the statistics agency reported that Canada’s economy lost the most jobs in October since the 2009 recession.
Yields on 10-year Government of Canada bonds dropped two basis points, or 0.02 percentage point, to 2.11 percent. The price of the 3.25 percent securities maturing in June 2021 increased 18 cents to C$109.73.
The U.S. jobless rate fell to 8.6 percent, the lowest level since March 2009, from 9 percent, Labor Department figures showed today. Payrolls climbed by 120,000, with more than half the hiring coming from retailers and temporary-help agencies, and a revised 100,000 advance in October was more than initially estimated. The median estimate in a Bloomberg News survey was for a gain of 125,000.
A European proposal to channel central bank loans through the IMF may deliver as much as 200 billion euros ($270 billion) to fight the debt crisis, two people familiar with the negotiations said.
At a Nov. 29 meeting attended by European Central Bank President Mario Draghi, euro-area finance ministers gave the go- ahead for work on the plan, said the people, who declined to be named because the talks are at an early stage.
“There’s a little bit of optimism on Europe,” Kit Juckes, head of foreign-exchange strategy at Societe Generale SA in London, said in a telephone interview.
To contact the reporter on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
