This morning's employment report from Statistics Canada is downright ugly, with 46,000 jobs lost in December and the unemployment rate climbing by 0.3 of a percentage point to 7.2 per cent. In the United States, growth in the labour market slowed last month to just 74,000 positions, though the jobless rate eased markedly to 6.7 per cent. The two reports combined added more pressure to the Canadian dollar, which tumbled fast to about 91.60 cents U.S. within minutes of the reports. The loonie, as Canada’s dollar coin is known, plunged as the job losses signalled that Bank of Canada Governor Stephen Poloz will likely be “dovish for longer,� said chief currency strategist Camilla Sutton of Bank of Nova Scotia. Coupled with that is the fact that Canada’s weak report – economists had projected gains of about 13,000 jobs – plays into a string of several soft economic readings of late. Canadian dollar sinks to 92¢ range Rob Carrick: Canadians' excessive debt has made rest of world wary of loonie Bertrand Marotte: Falling loonie spurs Sunquest to raise prices on package vacations Tavia Grant: Sliding loonie a big adjustment for businesses and consumers Loonie on the skids: Why the Canadian dollar could sink below 92¢ this week Scott Barlow in ROB Insight (for subscribers): You think the loonie's weak? Check out the Aussie dollar Why Goldman Sachs recommends shorting the Canadian dollar Even David Rosenberg is 'throwing in the towel' on the Canadian dollar Winners and ... bigger winners Bank of Montreal’s chief economist takes a look today at who wins, and who really wins, from the erosion of the loonie. As always in such things, much of it depends on where investors placed their bets. “Besides the obvious winners from a weaker currency – manufacturing, tourism, resources, NHL players who reside in Canada and just recently signed fat US$-based contracts – domestic investors who were shrewd enough to overweight in U.S. stocks have fared spectacularly well,� Douglas Porter said. “The double-headed lift of a strong S&P 500 and a rising US$ have created the biggest performance gap between U.S. and Canadian stocks in common currency terms since 1998/99.� During that period, Mr. Porter noted, American equities were “feasting� on the dot-com boom as the Asian crisis whacked Canadian resource stocks. In Canadian-dollar terms, Mr. Porter said, the benchmark S&P 500 index has shot up by more than 38 per cent over the past year. That, he pointed it, is almost 30 per cent more than the 9-per-cent gain in the S&P/TSX composite. “A third of that gap is due to the C$ alone,� he said. His comments come as the loonie, as Canada’s dollar coin is known, continues to hover around the 92-cent mark this morning.

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