TORONTO - The Canadian dollar closed sharply lower Friday amid a big miss in expectations for Canadian job creation last month.
The loonie fell 0.81 of a cent to 90.17 cents US as Statistics Canada reported that the economy shed 7,000 jobs in February. Economists had looked for a gain of 15,000 positions. The unemployment rate held steady at seven per cent.
The news was much better from the United States, where the economy created 175,000 jobs last month, well above expectations for 139,000 job gains. The unemployment rate rose to 6.7 per cent from 6.6 per cent, however, as more Americans looked for work.
The news was better from the trade front. Statistics Canada reported that Canada's trade deficit with the world narrowed from $922 million in December to $177 million in January. The agency said that merchandise imports declined 1.6 per cent while exports edged up 0.2 per cent.
In the U.S., the trade deficit increased to $39.1 billion, up 0.3 per cent from December’s revised $39-billion deficit as a rise in imports of oil and other foreign goods offset a solid increase in exports.
On the commodity markets, the April crude contract in New York was $1.02 higher at US$102.58 a barrel.
The commodity-sensitive loonie also lost ground amid losses in gold and copper.
Gold losses picked up after the release of the strong American jobs report as April bullion fell $13.60 to US$1,338.20 an ounce.
May copper tumbled 14 cents to US$3.08 a pound on Chinese growth concerns.
Analysts pointed to Chinese authorities allowing the country’s first corporate bond default. Investors in bonds sold in 2012 by Chaori Solar Energy Science & Technology Co., a manufacturer of solar panels, were paid as little as three per cent of the interest that was due Friday.
They say that move has fuelled speculation as to how many more companies may be in a similar situation and what negative impact that could have on the Chinese economy.
Some investors were playing it cautious ahead of the weekend and the ongoing Russia-Ukraine crisis.
The week start started off with a sell-off on markets after Russian troops last weekend invaded Ukraine's Crimea region, where it has major military installations and many people are Russian speaking.
Markets quickly regained their footing but there was a new round of nervousness Friday after a warning from the chief executive of Russian state gas company Gazprom. He said if Ukraine doesn’t pay its $1.89 billion debt for natural gas, “there is a risk of returning to the situation of the beginning of 2009.” At that time, Russia cut off supplies to Europe because of a pricing dispute with Ukraine.
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