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Loonie ends lower on disappointing jobs, trade data

Canadian dollars.


The Canadian dollar finished lower Friday but well off the worst levels of the session as job creation numbers for Canada and the United States missed by a wide margin.

The loonie had tumbled more than a cent after Statistics Canada reported that the economy shed 55,000 jobs – all full time – in March. But the dollar ended the session down 0.39 of a cent at 98.39 cents (U.S.).

Generally speaking, economists had expected about 6,500 jobs to have been created last month, although BMO Nesbitt Burns Inc. had suggested it could be as many as 18,000.

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The unemployment rate rose by 0.2 percentage points to 7.2 per cent.

The dollar was also punished by other data that showed a big increase in Canada's trade deficit with the rest of the world and concerns that interest rate hikes could be further off than thought.

In the U.S., the Labour Department reported that the economy only managed to crank out 88,000 jobs last month even as the jobless rate declined 0.1 percentage points to 7.6 per cent.

Traders had started the week off expecting that the U.S. non-farm payrolls report would show that about 190,000 jobs were produced in March following a reading of 220,000 in February.

But that was before the release of data over the past few days showing slower-than-expected expansion in both the manufacturing and service sectors, capped off with a report from payroll firm ADP that the economy created fewer-than-expected jobs in the private sector.

Meanwhile, Statistics Canada said the trade deficit widened from $746-million (Canadian) in January to $1-billion in February.

Exports decreased 0.6 per cent to $38.5-billion, with shipments of metal and non-metallic mineral products contributing the most to the decline. The agency said this was partly offset by an increase in motor vehicles and parts.

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Imports edged up 0.1 per cent to $39.5-billion.

Commodity markets were generally lower following the jobs data as the June crude contract on the New York Mercantile Exchange lost 56 cents to $92.70 (U.S.) a barrel and May copper was off a cent to $3.34 a pound.

But the weak jobs data pushed bullion prices higher as the June gold contract rose $23.50 to $1,575.90 an ounce.

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