The Canadian dollar fell in its biggest loss in nine months against its U.S. peer after the nation unexpectedly lost jobs last month by the most since the last recession four years ago.
The currency declined against all of its 16 major peers as Canada lost 54,500 jobs, compared with the 6,500 job gain predicted in the median estimate of a Bloomberg survey of 24 economists. The nation’s jobless rate increased to 7.2% from 7%. The U.S. added 88,000 jobs in March, compared with estimates of a 190,000 gain. The Bank of Canada’s March 6 policy statement called for the economy to “pick up through 2013” on its way to 2% annual growth.
“Huge miss on both numbers, but particularly the Canadian number after many months of surprisingly strong employment data, we’ve finally seen some give back, so pretty swift reaction for the Canadian dollar,” said Blake Jespersen, managing director of foreign exchange at Bank of Montreal, by phone from Toronto. “There’s a lot more room for this to run, I think this is just the beginning of what could be a series of weaker employment numbers in Canada.”
The loonie, as the Canadian dollar is known for the image of the C$1 coin, fell 0.8% to C$1.0210 at 9:44 a.m. in Toronto. It was the largest drop since June 28. One loonie buys 97.94 U.S. cents.
Canada’s benchmark 10-year government bonds rose, with yields falling seven basis points or 0.07 percentage point to 1.73%. The 1.5% security maturing in June 2023 rose 61 cents to C$97.93.
Crude oil, the country’s biggest export, fell 1.5% to $91.91 per barrel, its lowest point since March 21, before paring losses to $92.38 per barrel.
The Standard & Poor’s 500 Index of U.S. stocks fell 1.1%.
Canada’s jobs figures brings the labor market more in line with other parts of the economy, where output growth slowed to a 0.6% annualized pace in the fourth quarter and inflation has lagged the central bank’s 2% target since May.
A separate report showed Canada recorded its 11th straight merchandise trade deficit in February, the longest streak in at least 25 years, with the shortfall unexpectedly widening as exports of metals declined.