Canadian forex review: C$ down more than two cents this week

By Commodity News Service Canada

WINNIPEG, Jan. 10 – The Canadian dollar plunged lower for the fifth straight day on Friday, making for a total loss of more than two and a quarter cents against the US dollar since last Friday.

Disappointing Canadian employment data was to blame for the decline on Friday, analysts said. Statistics Canada reported that 46,000 jobs were lost in Canada during the month of December, while economists expected an increase of 14,000 jobs. The unemployment rate rose to 7.2 per cent, from 6.9 per cent.

The Canadian currency closed at US$0.9173 or US$1=C$1.0901 on Friday, which compares with Thursday’s North American settlement of US$0.9215 or US$=C$1.0852.

A positive unemployment rate report from the US was also bearish for the loonie. Though there were less jobs created in the US than anticipated during the month of December, the unemployment rate dropped to 6.7 per cent, from 7.0 per cent.

However, the Canadian dollar’s downside potential was limited by spillover support from the advances seen in crude oil, gold and copper prices.

Canadian bonds moved higher, as the release of disappointing Canadian employment data had traders more interested in safe-haven assets, brokers said.

The two-year bond yielded 1.015% late Friday, from 1.100% late Thursday. The 10-year bond yielded 2.560%, from 2.687%. Bond yields fall as their prices rise.