BUSINESS

Canadian dollar slides on weak job creation data, tumbling oil prices

07/06/2012 08:58 EDT | Updated 09/05/2012 05:12 EDT
TORONTO - The Canadian dollar closed lower Friday amid weak American jobs data and sliding oil prices.

The loonie was down 0.41 of a cent at 98.17 cents US as traders also took in tepid domestic job creation figures from Statistics Canada. The agency said just 7,300 jobs were created in June, although that was a bit better than expectations.

The U.S. Labour Department reported that the American economy only managed to crank out 80,000 jobs last month, below already modest expectations for 90,000 positions.

The currency was also depressed by crude oil prices which fell sharply despite interest rate cuts announced Thursday by the European and Chinese central banks.

Commodity prices were also pressured as traders flocked to the perceived safe haven of U.S. Treasuries following the release of the data.

A stronger greenback usually helps depress commodities prices, which are denominated in dollars, as it makes oil and metals more expensive for holders of other currencies.

The August crude contract fell $2.77 to US$84.45 a barrel after International Monetary Fund Managing Director Christine Lagarde said Friday that the IMF will cut its forecast for global economic growth in a quarterly assessment to be released later this month.

She did not say which countries or regions were contributing to the lowered assessment for 2012 and declined to give more details.

Growth in most major economies has showed signs of slowing in recent months, partly due to Europe’s chronic debt crisis and economic malaise.

Diminishing demand prospects also pushed metal prices lower with the September copper contract on the Nymex off eight cents at US$3.41 a pound. Gold bullion backed off $30.50 to US$1,578.90 an ounce.