News Column

Canadian dollar falls amid disappointing jobs figures, lower commodities

July 11, 2014

Linda Nguyen, The Canadian Press



TORONTO - The Canadian dollar lost some of its momentum Friday, amid lower commodity prices and disappointing Canadian jobs figures.

The loonie faded 0.29 of a cent to 93.63 cents US.

Statistics Canada reported that the economy had an unexpected loss of 9,400 jobs in June, with the unemployment rate rising one-tenth of a point to 7.1 per cent the highest since last December. Full-time employment rose by 33,500, partly making up for the loss of 43,000 part-time jobs.

Economists had expected another big month of job creation following May's 25,800 gain, but June resumed what has become a year-long trend of weak demand for workers. They had forecasted the agency would report that about 24,000 jobs were created.

These latest jobs figures will no doubt be front and centre of the Bank of Canada's next interest rate announcement and release of its latest monetary policy report, due next Wednesday.

The Canadian dollar has been hovering around the 94-cent US range as of late, which has raised fresh concerns how the higher currency is affecting the country's exports and manufacturing sectors. Bank of Canada governor Stephen Poloz has been depending on a weakened Canadian dollar to help drive exports and aid in Canada's economic recovery.

"Today's disappointing results will give the Bank of Canada more reasons to stay on their dovish script when they make their announcement next Wednesday, with their preference for a neutral stance on rate hikes to be maintained, despite accelerating inflation readings," said Nick Exarhos, an economist with CIBC World Markets in a note.

"All told, fixed income should see a bid, and the loonie should give up some of its recent strength."

The currency will also be looking for direction from the release of the latest inflation figures due next Friday.

It also continues to look for hints that the fundamentals, including oil prices, are supporting its price. Oil rose for the first time in two weeks on Thursday, but pulled back from gains with the August crude contract on the New York Mercantile Exchange dipping 74 cents to US$102.19 a barrel.

Oil prices shot up in the last month to a 10-month high over concerns that strife in Iraq might disrupt supplies. However, they have since been easing back as al-Qaida-inspired militants' gains in Iraq did not affect oil exporters.

On Friday, Iraq'sOil Ministry said Kurdish fighters have taken over two oil fields outside the disputed northern city of Kirkuk.

Ministry spokesman Assem Jihad says the Kurdish forces known as peshmerga seized the Bai Hassan and Kirkuk oil fields before dawn, calling the move "a violation to the constitution... and a threat to national unity.''

Meanwhile, the prospect of a sudden return of Libyan oil to the global market has also lessened global supply worries. Libyan exports have been all but cut off over the last several months because of labour and political strife that has shut ports and disrupted production. Agreements with local militias are now expected to open two ports, and a major field restarted production Tuesday.

In other commodities, gold prices also dropped, with August gold bullion falling $2.20 to US$1,336.90 an ounce. September copper fell a penny to US$3.25 a pound.

Follow @LindaNguyenTO on Twitter.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Canadian Press DataFile


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters