Canadian dollar rises as December job creation blows past expectations
Posted Jan 4, 2013 04:38:05 PM.
This article is more than 5 years old.
TORONTO – The Canadian dollar closed higher Friday amid data showing much stronger than expected job creation in December.
The loonie was up 0.1 of a cent at 101.31 cents US as Statistics Canada reported the economy created 40,000 jobs last month. Economists had believed that only about 5,000 positions would be turned out in December after a surge of 59,000 new jobs in November.
At the same time, the unemployment rate edged down to a four-year low of 7.1 per cent from 7.2 per cent.
There was also positive news from Canada’s biggest trading partner as the U.S. Labor Department reported that the American economy created 155,000 jobs in December.
That was in line with heightened expectations after payroll firm ADP reported Thursday that the U.S. private sector cranked out 215,000 jobs last month.
The loonie had been lower earlier in the morning as the American currency strengthened in the wake of indications that the Federal Reserve could wind up its bond buying stimulus program by the end of the year.
Minutes from the Fed’s latest policy meeting last month showed that policy-makers expressed broad support for the central bank’s plan to buy bonds to support the U.S. economy. But there was a split over how long to continue the purchases.
Some of its voting members thought the program should continue throughout the year, while others felt it should be slowed or stopped before the end of 2013 amid concerns that the continued bond purchases, known as quantitative easing, would destabilize the economy.
Lower commodities had pressured the loonie with the February bullion contract on the New York Mercantile Exchange falling $25.70 to US$1,648.90 an ounce.
The Federal Reserve’s quantitative easing program has been supportive of gold prices. Bullion has looked attractive as an inflation hedge since the QE program has involved printing more dollars to buy up bonds.
March copper fell two cents to US$3.69 a pound while February crude on the Nymex gained 17 cents to US$93.09 a barrel.
