Canadian dollar falls amid weak jobs report
A Canadian dollar, left, and a Euro are seen next to a series of U.S. dollars in this January 26, 2011 photo in Montreal. THE CANADIAN PRESS/Paul Chiasson
TORONTO - The Canadian dollar fell sharply Friday as a disappointing read on American job creation pushed benchmark oil below US$100 a barrel for the first time since February.
The commodity-sensitive currency lost 0.67 of a cent to 100.45 cents US as the U.S. Labour Department reported that the American economy created only 115,000 jobs in April, far less than the 160,000 that economists had expected.
On a more positive note, the U.S. unemployment rate edged down 0.1 of a point to 8.1 per cent and revisions to the past two months added an additional 53,000 jobs. But the jobless rate slipped because fewer people were looking for work.
The Canadian dollar often loses ground on negative U.S. economic data. That's because it raises worries that slower conditions south of the border will crimp demand for Canadian resource products and manufactured goods.
Further signs of economic weakness that could erode demand pushed crude prices lower with the June contact on the New York Mercantile Exchange down $4.05 at US$98.49 a barrel.
Copper prices fell for a third day, down two cents to US$3.72 a pound.
Gold bullion advanced after four losing sessions, with the June contract up $10.40 to US$1,645.20 an ounce.
Commodities have been under pressure this week amid weak manufacturing data from Europe and China.
Prices came under additional pressure Thursday as a key gauge of the performance of the U.S. non-manufacturing sector showed further expansion in April but at a slower pace than expected. The sector accounts for 90 per cent of the U.S. economy.
On Friday, traders also focused on weekend elections in France and Greece. In France, President Nicolas Sarkozy has for weeks looked like he would lose to his socialist rival Francois Hollande, but recent opinion polls suggest the election could be tighter than expected.
Though a change in leadership in Paris could prompt a change in the way Europe responds to the debt crisis that’s already seen three countries bailed out, the elections in Greece have the potential to prompt far more volatility once markets reopen Monday.
That is because the traditional parties of the right and left will likely not get anything like the level of support they have been used to. New Democracy and Pasok are backing the harsh terms of the most recent bailout, unlike many of the smaller parties that may well garner some support in Sunday’s elections.
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