TORONTO - The Canadian dollar was higher Friday morning following the release of much better than expected job creation data for April.
The currency shook off early losses to move up 0.24 of a cent to 100.07 cents US as Statistics Canada reported that the economy cranked out 58,200 jobs, much higher than the 10,000 that economists had expected.
Still, the jobless rate edged up 0.1 of a percentage point to 7.3 per cent as more people were looking for work.
The loonie had lost ground earlier in the session as traders avoided risk amid a huge trading loss at American banking giant JPMorgan Chase, disappointing Chinese data and continued eurozone turmoil resulting from last weekend's Greek elections.
But the strong employment showing suggested that the Bank of Canada may move sooner than previously expected to hike interest rates.
"While we had forecast no hikes by the Bank of Canada this year, today’s data clearly lean against that call and we will have to be on guard for further signs of a sharp growth pick up in data for March/April," said Avery Shenfeld, chief economist at CIBC World Markets.
Markets were nervous after JPMorgan announced after markets closed Thursday that it lost US$2 billion in the past six weeks in a trading portfolio designed to hedge against risks the company takes with its own money.
The unexpected loss at one of the world’s most venerated banks undermined investor confidence.
Meanwhile, investors wondered what steps the Chinese government could take to get the world’s second-largest economy back on track.
Data released Friday showed that industrial production rose 9.3 per cent from a year earlier in April, slowing from a nearly 12 per cent increase in March.
Another report showed inflation also eased, to 3.4 per cent in April from 3.6 per cent the month before, giving the government greater leeway to ease policy to boost growth.
China’s economy grew 8.1 per cent in the first quarter of the year, a still robust rate but its slowest pace since 2009. It was below the previous quarter’s 8.9 per cent, but above the government’s 7.5 per cent target for the year.
Commodities backed off following the release of the Chinese data with the June crude contract on the New York Mercantile Exchange down $1.23 to US$95.85 a barrel.
Metal prices also retreated with July copper off six cents to US$3.63 a pound. China is the world's biggest consumer of the metal which is viewed as an economic barometer as it is used in so many different industries.
Bullion prices also faded with the June contract in New York down $12.30 to US$1,583.20 an ounce.
Eurozone worries also weighed on markets.
Another general election is expected in Greece for next month following the failure of attempts to forge a government since Sunday’s poll.
The head of a small left-wing party and potential kingmaker in Greece’s coalition negotiations said Friday he would not join forces with the conservatives and socialists to form a government.