Canadian Dollar Falls as Economy Sheds More Jobs Than Forecast

By Sapna Maheshwari and Chris Fournier

Aug. 7 (Bloomberg) -- Canada’s dollar fell versus its U.S. counterpart after a government report showed the nation’s economy lost more jobs in July than economists forecast.

“The knee-jerk reaction says it all,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto. “Three times more jobs lost than consensus -- ultimately this is not positive for the Canadian dollar. The market will very quickly refocus on the U.S. number at 8:30 a.m. as an influence from a global perspective.”

The loonie, as the currency is known, slid 0.6 percent to C$1.0841 per U.S. dollar at 7:17 a.m. in Toronto, from C$1.0777 yesterday. It touched C$1.0633 on Aug. 4, the strongest level since Oct. 2.

Employment dropped by a net 44,500 positions last month after a net loss of 7,400 in June, Statistics Canada reported today in Ottawa. The median forecast of 22 economists surveyed by Bloomberg News was for a reduction of 15,000 jobs in July. The unemployment rate remained at 8.6 percent.

“The only good news is that it’s behind us,” said Firas Askari, head currency trader in Toronto at BMO Capital Markets, a unit of Canada’s fourth-largest lender.

U.S. payrolls shed 325,000 jobs in July after losing 467,000 in the previous month, according to a separate Bloomberg News survey. The report from the Labor Department is due at 8:30 a.m. in New York.

The Canadian dollar gained 13 percent this year against its U.S. counterpart as investors sought assets that historically benefit when global demand rebounds.

To contact the reporters on this story: Sapna Maheshwari in New York at smaheshwar11@bloomberg.net; Chris Fournier in Montreal at cfournier3@bloomberg.net