BLBG: Canada’s Dollar Gains as U.S. Greenback Falls on Jobs Data
Canada’s dollar gained as its U.S. counterpart weakened against several major currencies on a report showing the number of Americans collecting unemployment benefits reached a 26-year high.
“The slight rebound reflects the broader downward pressure on the U.S. dollar,” said Todd Elmer, currency strategist at Citigroup Global Markets Inc. in New York. “There is some nervousness over the employment indicators that may be contributing to dollar decline.”
Canada’s dollar rose 0.8 percent to C$1.1847 per U.S. dollar at 11:18 a.m. in Toronto, from C$1.1940 yesterday, after earlier falling as much as 1.1 percent. One Canadian dollar buys 84.41 U.S. cents.
The loonie, as Canada’s currency is known, gained this week against 13 of the 16 most actively traded currencies tracked by Bloomberg, increasing 1.8 percent against the U.S. dollar.
Canadian business and government spending fell less than expected last month, the Ivey purchasing managers’ index showed. The index fell to 39.1, compared with a reading of 40.2 in November. An index above 50 means the number of firms who said business improved was greater than the number saying it deteriorated. The median forecast of 15 economists in a Bloomberg News survey was for a reading of 37.5.
The total number of American receiving unemployment benefits rose in the week ended Dec. 27 to 4.6 million, the most since 1982, the U.S. Labor Department said today. Initial jobless claims fell to 467,000 in the week that ended Jan. 3.
The Canadian dollar weakened 18 percent against the dollar in 2008, the biggest decline on record, as the global recession curbed demand for commodities.
Crude oil for February delivery fell 2.8 percent to $41.42 a barrel on the New York Mercantile Exchange today. Crude, down 57 percent from a year ago, is the largest component of the Bank of Canada’s Commodity Price Index, accounting for 21 percent.
The yield on the two-year Canadian government bond was little changed at 1.14 percent. The price of the 2.75 percent security due in December 2010 fell 2 cents to C$102.99.
