BUSINESS

Canadian dollar lower, American currency strengthens on solid job creation data

03/06/2015 08:50 EST | Updated 05/06/2015 05:59 EDT
TORONTO - The Canadian dollar closed lower Friday amid a strengthening greenback as U.S. job creation for February beat expectations.

The loonie moved down 0.66 of a U.S. cent to 79.3 cents as the U.S. Labor Department announced that the economy created 295,000 jobs last month, much higher than the 245,000 that economists expected.

Canadian employment data for February will be released March 13.

Other data showed that U.S. wage growth in February was up just 0.1 per cent.

Analysts said wage increases would be the most closely-watched data from the U.S. employment report since the slow pace of wage growth has been a disappointment so far.

Stronger wage growth would likely add to pressure on the U.S. Federal Reserve to raise borrowing rates this year for the first time since the 2008 global financial crisis. Analysts believe the Fed could move to hike rates as early as June.

Traders also took in data showing a much higher than expected Canadian trade deficit for January.

Statistics Canada said the country's merchandise trade deficit with the world grew to $2.5 billion, up sharply from a $1.2-billion deficit in January and is the largest since mid-2012.

The trade deficit was also much higher than the $1 billion figure that economists had expected.

The agency says the deficit increased as exports fell 2.8 per cent in January while imports were largely unchanged from December.

In other economic news Friday, there was positive data from Europe's largest economy as German industrial production rose by 0.6 per cent in January, higher than the 0.5 per cent increase that had been expected.

That data came out a day after European Central Bank president Mario Draghi said the ECB had upgraded its growth forecast for the eurozone in 2015 to 1.5 per cent from 1.0 per cent.

Draghi added that the central bank expects the economic recovery to broaden and strengthen.

On the commodity markets, oil prices headed lower with the April crude contract in New York $1.15 lower at US$49.61 a barrel.

April gold bullion was down $31.90 to US$1,164.30 an ounce while May copper fell four cents to US$2.61 a pound.