By Commodity News Service Canada
WINNIPEG, August 8 – The Canadian dollar dropped sharply lower relative to the US dollar on Friday, reacting to disappointing Canadian employment data, analysts said.
Statistics Canada said only 200 new jobs were created in July, falling well below expectations of 20,000 newly created positions. The unemployment rate managed to drop to 7.0 per cent, from 7.1 per cent in June.
The Canadian dollar closed at US$0.9115 or US$1=C$1.0971 on Friday, which compares with Thursday’s North American settlement of US$0.9157 or US$1=C$1.0921.
Risk aversion, due to ongoing worries about geopolitical problems in the Ukraine and Russia was also bearish for the Canadian dollar.
However, firmness in crude oil, gold and copper prices helped to limit the downside, market watchers said.
Canadian bonds ended higher, reacting to the disappointing Canadian jobs data and ongoing geopolitical worries. Though, profit taking at the highs limited the gains, traders said.
The two-year bond yielded 1.058% late Friday, from 1.068% late Thursday. The 10-year bond yielded 2.061%, from 2.076%. Bond yields fall as their prices rise.
