Canada’s dollar declined to the lowest in two weeks as a government report showed employers cut 129,000 jobs in January, fueling concern that the country’s economy is deteriorating. “A shocker,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto. “There’s little that one can take from this data to lend any material support for the Canadian dollar in the short term.” Canada’s dollar fell 1.1 percent to C$1.2483 per U.S. dollar at 9:24 a.m. in Toronto, from $1.2323 yesterday. It touched C$1.2650 on Jan. 23. One Canadian dollar buys 80.12 U.S. cents. The loonie, as the Canadian dollar is known, fell against all 16 major currencies, weakening the most against the Australian dollar and the New Zealand dollar. The monthly job losses were the largest since the methodology of the employment survey was last changed in 1976, Statistics Canada said today in Ottawa. The jobless rate rose to 7.2 percent, a four-year high, from 6.6 percent in December. Economists surveyed by Bloomberg expected that employers would cut 40,000 positions, the median forecast. Canadian Finance Minister Jim Flaherty yesterday warned that the employment data would likely be “regrettable,” and suggested the government may need to implement another stimulus package because the economy is deteriorating. This is Canada’s first recession since 1992, and the economy will contract 1.2 percent this year, according to the Bank of Canada. Forecasts “The numbers were shocking, even with the warning yesterday,” said Steven Butler, director of foreign-exchange trading in Toronto at Scotia Capital, a unit of Canada’s third- largest bank. “This will clearly add a lot of pressure to the Canadian dollar.” Canada’s dollar will weaken to C$1.28, then C$1.30, Butler said. The currency dropped 18 percent in 2008 as the global recession reduced export demand, and is headed for a 1.3 percent gain this week after some commodities helped spur gains. “It’s not bad to buy the Canadian dollar again” as it sinks to C$1.27 to C$1.28, said Firas Askari, head currency trader in Toronto at BMO Nesbitt Burns, a unit of Bank of Montreal. “But be patient. You will get better levels to buy.” The Bank of Canada lowered its overnight lending rate seven times since the end of 2007, reducing it by 50 basis points to 1 percent on Jan. 20. The central bank’s next meeting is scheduled for March 3. “A weak number cements the view that the economy is truly bad enough to justify further easing,” Michael Gregory, a senior economist at BMO Capital Markets in Toronto, said before the report was released. Further easing is “a net weakening factor for the Canadian dollar.” The U.S. unemployment rate rose to 7.6 percent in January from 7.2 percent, the highest level since 1992. Payrolls tumbled by 598,000, the biggest monthly decline since December 1974. The losses mark the first time since records began in 1939 that payroll cuts have exceeded half a million for three straight months.

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