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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