Canadian Dollar And Business Outlook

By Commodity News Service Canada

WINNIPEG, February 8 The Canadian dollar dropped sharply, falling below parity with the US dollar at 8:44 CST Friday, as weak Canadian employment data weighed on its value, analysts said.

According to Statistics Canada, the country lost 22,000 jobs in January, much lower than the 5,000 jobs increase traders expected. But, a decline in the number of people looking for jobs moved the unemployment rate down 0.1 percentage points to 7.0%.

At 8:44 CST Friday, the Canadian dollar was at US$0.9977 or US$=C$1.0023, which compares with Thursday’s North American close of US$1.0020 or US$=C$0.9980.

Soft Canadian trade deficit data also had traders shying away from the Canadian dollar. StatsCan said Canada’s trade deficit with the world came in at C$901 million in December, which compares to C$1.7 billion in November.

Disappointing Canadian housing starts also undermined the value of the loonie. According to Canada Mortgage and Housing Corp, housing starts dropped to 160,600 in January, below expectations of 195,000.

The TSX was down 5.67 points, or 0.04%, at 8:44 CST Friday morning to sit at 12,755.92.