The Canadian dollar fell versus most of its major peers amid speculation that a weaker-than-forecast report on U.S. jobs won’t keep the Federal Reserve from slowing monetary stimulus as soon as next month. The currency pared a loss against its U.S. counterpart after data showed American employers added fewer workers than anticipated in July even as the jobless rate fell. Earlier the loonie, as the Canadian dollar is nicknamed for the image of the aquatic bird on the C$1 coin, touched a two-week low versus the greenback. The U.S. is Canada’s biggest trade partner. “It’s certainly not a game changer,� Adam Button, a currency analyst at forexlive.com, said of the payrolls report. “The Bank of Canada is very confident in this U.S. recovery. One number never really changes anything.� The loonie depreciated 0.3 percent to C$1.0373 per U.S. dollar at 10:54 a.m. in Toronto. It touched C$1.0403, the weakest level since July 18. One Canadian dollar purchases 96.40 U.S. cents. The Canadian currency briefly erased losses against the greenback after the U.S. Labor Department reported a 162,000-job increase in U.S. payrolls last month, the smallest in four months. The median forecast of 93 economists surveyed by Bloomberg called for a 185,000 gain. The U.S. unemployment rate declined to 7.4 percent, from 7.6 percent the previous month. Canadian Exports “All of a sudden it became ‘maybe the U.S. economy, which is Canada’s biggest export partner, is not as strong as we thought, and how is that really going to impact Canadian growth?’� said Adrian Miller, director of fixed-income strategies at GMP Securities LLC, by phone from New York. “That does not bode well for Canadian exports.� Half of 54 economists surveyed by Bloomberg last month said the Fed may curb its monthly purchases to a total of $65 billion at its Sept. 17-18 policy meeting. Fed Chairman Ben S. Bernanke told Congress in July that any reduction in stimulus would depend on the economy’s performance. He said this week after a two-day Fed meeting the U.S. economic expansion has been “modest� and pledged to maintain the central bank’s asset purchases to hold down borrowing costs and spur growth. Canada gained 6,000 jobs in July, after losing 400 the previous month, economists in a Bloomberg survey forecast before a government report due Aug. 9. The unemployment rate was unchanged at 7.1 percent, economists projected. The nation’s gross domestic product rose 0.2 percent in May from 0.1 percent the month before, Statistics Canada reported July 31 in Ottawa. Economists in a Bloomberg survey had estimated 0.3 percent growth. To contact the reporters on this story: Ari Altstedter in Toronto at aaltstedter@bloomberg.net; Jeff Marshall in New York at jmarshall75@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

Source