“What matters more for Canada is the U.S. market, and the trade balance improved a lot in the U.S.,” Sebastien Galy, a foreign-exchange strategist at Societe Generale SA, said by phone from New York. “That’s the reason why dollar-Canada, even though it got hit and the risks are asymmetric, considering how badly positioned the market is for news out of Canada, it’s really a very subdued reaction.”
Employment in Canada fell in January for the first time in six months, dropping by 21,900 jobs following December’s revised gain of 31,200, Statistics Canada said today in Ottawa. The unemployment rate decreased to 7%, from 7.1%, the lowest since December 2008’s 6.8%, as fewer people looked for work.
Economists surveyed by Bloomberg News projected a 5,000-job gain and 7.2% unemployment.
Bank of Canada Governor Mark Carney said Jan. 23 the need to raise interest rates is less urgent than previously thought because Canada’s economy will take longer to reach full output. Policy makers said an increase in the rate may still be needed over time. The central bank has kept its benchmark rate at 1% since 2010 to spur the economy.
The loonie fell against the currencies of Australia and New Zealand, which like Canada export commodities, after China’s trade expanded in January more than forecast. The Chinese government said exports gained 25% from a year earlier and imports rose 28.8%.
The Canadian dollar posted its biggest drop versus its Australian counterpart since October, sliding as much as 1% before trading at C$1.0342, down 0.8%. The loonie lost 0.7% to 83.69 cents per New Zealand dollar.
Canada’s currency has fallen 0.6% this year against 10 developed-nation currencies tracked by Bloomberg Correlation- Weighted Indexes. The greenback has gained 0.6%, New Zealand’s dollar climbed 1.5%.