BUSINESS

Loonie recovers after disappointing Canadian unemployment data, Chinese reports

08/10/2012 09:15 EDT | Updated 10/10/2012 05:12 EDT
TORONTO - The loonie moved higher Friday after having declined earlier on the heels of a disappointing domestic jobs report.

The Canadian dollar closed at 100.91 cents US, up 0.1 of a cent. It had fallen as low as 100.3 cents US, down nearly half a cent from Thursday's close, shortly after Statistics Canada issued its jobs report for July.

Statistics Canada reported that the country's unemployment rate rose one-tenth of a point to 7.3 per cent in July as the economy shed 30,400 jobs, rather than adding 6,000 positions as analysts had expected.

"There was a rise in full time employment, but that was it for the good news," said CIBC economist Avery Shenfeld in a note.

"Large declines in employment in wholesale (and) retail trade, and job losses in manufacturing, resources and the public sector, contributed to the weakness in the headline figure."

The state of China's economy is also in focus after a round of dismal trade data from the world's second-largest economy.

The Chinese economic figures causing most concern on Friday was the trade data for July. Exports rose just one per cent year over year, sharply below forecasts of five per cent, while import growth fell to 4.7 per cent from the previous month's 6.3 per cent, also below expectations.

The trade surplus with the 27-country European Union, China's biggest trading partner, narrowed by 37.9 per cent to $10.8 billion, reflecting sluggish demand in Europe, which is wrestling with a debt crisis and recession.

The figures, which came a day after China reported a slowdown in auto sales and factory output, are likely to heap the pressure on Beijing to take more measures to boost economic growth.

In commodities, the September crude contract on the New York Mercantile Exchange closed down 49 cents to US$92.87 a barrel.

September copper moved down 3.3 cents to US$3.39 a pound while December gold moved ahead $2.60 to US$1,622.80 an ounce.