The Canadian dollar lost some of its momentum Friday, amid lower commodity prices and disappointing Canadian jobs figures.
The loonie faded 0.29 of a cent to 93.63 cents US.
Statistics Canada reported that the economy had an unexpected loss of 9,400 jobs in June, with the unemployment rate rising one-tenth of a point to 7.1 per cent — the highest since last December. Full-time employment rose by 33,500, partly making up for the loss of 43,000 part-time jobs.
Economists had expected another big month of job creation following May’s 25,800 gain, but June resumed what has become a year-long trend of weak demand for workers. They had forecasted the agency would report that about 24,000 jobs were created.
These latest jobs figures will no doubt be front and centre of the Bank of Canada’s next interest rate announcement and release of its latest monetary policy report, due next Wednesday.
The Canadian dollar has been hovering around the 94-cent US range as of late, which has raised fresh concerns how the higher currency is affecting the country’s exports and manufacturing sectors. Bank of Canada governor Stephen Poloz has been depending on a weakened Canadian dollar to help drive exports and aid in Canada’s economic recovery.
“Today’s disappointing results will give the Bank of Canada more reasons to stay on their dovish script when they make their announcement next Wednesday, with their preference for a neutral stance on rate hikes to be maintained, despite accelerating inflation readings,” said Nick Exarhos , an economist with CIBC World Markets in a note.