Bloomberg News

Canadian Dollar Touches Highest Since May on Employment Gain

July 08, 2011

July 8 (Bloomberg) -- Canada’s dollar touched the highest level since May after a government report showed employers added more jobs last month than economists forecast.

“It’s a bit of a sister kisser,” David Watt, senior currency strategist at Royal Bank of Canada’s RBC Capital unit, said by phone from Toronto. “It’s fairly neutral,” Watt said, referring to the Canadian dollar.

The Canadian currency was little changed at 95.88 cents per U.S. dollar at 7:12 a.m. in Toronto, compared with 95.87 yesterday, after touching 95.66 cents, the strongest level since May 11. One Canadian dollar buys $1.0426.

Canada’s economy added 28,400 jobs in June after boosting payrolls by a net 22,300 positions in the previous month, Statistics Canada reported today. The median forecast of 27 economists in a Bloomberg News survey was for a gain of 15,000. The jobless rate held at 7.4 percent.

The Bank of Canada has held the benchmark overnight rate at 1 percent since September after raising it three times in 2010. Governor Mark Carney reiterated last month in Vancouver that borrowing costs will “eventually” rise as the economy returns to full capacity.

Canada’s government bonds have returned 2.1 percent this year, according to a Bank of America Merrill Lynch index. The Canadian dollar has gained 4 percent against its U.S. counterpart in 2011, according to Bloomberg data.

U.S. Payrolls

U.S. payrolls rose by 105,000 workers after a 54,000 increase in May that was the smallest in eight months, according to the median forecast of 85 economists in a Bloomberg News survey before the Labor Department’s report today. The unemployment rate is projected to stay at 9.1 percent.

Companies added more workers in June than forecast, a report from ADP Employer Services based on payrolls indicated yesterday. An increase of 157,000 followed a revised gain of 36,000 in the previous month.

Canada’s dollar has weakened 1.1 percent this year versus the currencies of nine developed nations in the fourth-worst performance, according to Bloomberg Correlation-Weighted Currency Indexes. The yen has fallen 5.6 percent, the greenback if off 5.3 percent and sterling is down 2.9 percent.

--Editors: Dennis Fitzgerald

To contact the reporters for this story: Chris Fournier in Montreal at cfournier3@bloomberg.net; Frederic Tomesco in Montreal at tomesco@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net


Hollywood Goes YouTube
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus