By Commodity News Service Canada
Winnipeg – February 8/13 – CNS – The Canadian dollar was
trading at a weaker level versus the US currency in late North
American activity on Friday. The Canadian unit dropped below
parity with the US currency in response to weak domestic economic
indicators, market watchers said.
Investors fled the Canadian dollar and moved into the US
unit as the weak economic data encouraged sentiment that the Bank
of Canada will not be in any hurry to raise interest rates
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The Canadian currency late in the afternoon was quoted at
C$1.0031 (99.69 US cents). This compares with Thursday’s late
North American quote of C$0.9980 (100.20 US cents).
The Canadian dollar’s main influence was Canada’s employment
figures, which saw the economy lose 21,900 jobs in January,
missing expectations of a 5,000 gain. The jobless rate moved one
notch lower to 7.0% from 7.1% in the month.
Canada’s trade deficit also decreased from C$901 million in
December from C$1.7 billion in November, according to Statistics
Canada.
Declines in global crude oil also heled to weaken the
Canadian dollar.
Canadian bonds posted significant advances along the yield
curve on Friday after a round of poor domestic economic data
this year, market watchers said.
Canada’s two-year bond yield is at 1.111% Friday, from
1.154% Thursday. The 10-year bond yields 1.964%, from 1.994%.
Bond yields move inversely to bond prices.
The week’s main event was Canada’s labour figures, which saw
the economy lose 21,900 jobs in January, missing expectations of
a 5,000 gain. The jobless rate moved one notch lower to 7.0% from
7.1% in the month.
Separately, Canada’s trade deficit with the world decreased
from C$901 million in December from C$1.7 billion in November,
according to Statistics Canada.
Although the headline reading was above expectations, which
had the trade deficit decreasing to C$1.45 billion, there was a
noted decline in two-way trade, with imports falling faster than
exports.
Domestic housing starts, released prior to the labour and
trade data, also supported bonds. Canadian housing starts in
January plunged to 160,600, down from a revised 197,100 reading
in the prior month. Economists expected the economy to report
195,000 starts.
END