Canadian Dollar Drops After February’s Job Loss Report

Canada’s dollar lost the most in more than two weeks after employers unexpectedly eliminated jobs in February, reviving speculation the central bank may need to cut interest rates to bolster economic growth.

The currency, called the loonie, fell for the first time in three days as the U.S., Canada’s biggest trade partner, added more jobs than forecast. The loonie gained for the past two days after the Bank of Canada kept its key interest rate unchanged, citing stronger-than-expected reports on growth and inflation, and said future moves will depend on economic data.

“It wouldn’t surprise me to see another half-percent lower” in the Canadian dollar, Greg Anderson, head of global foreign-exchange strategy at Bank of Montreal, said by phone from New York. “It doesn’t juxtapose well against the U.S. number, and it probably gives the Bank of Canada full justification to be very soft with rhetoric now for another three months.”

The loonie, nicknamed for the image of the aquatic bird on the C$1 coin, depreciated 0.9 percent to C$1.1080 per U.S. dollar at 9:41 a.m. in Toronto. It weakened as much as 1 percent, the biggest intraday drop since Feb. 19. The currency touched C$1.0956 yesterday, the strongest level since Feb. 19. One Canadian dollar buys 90.25 U.S. cents.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza