Canadian Forex/Bond Review: C$ Weakens

The Canadian dollar finished Friday's North American trading session on a weaker footing versus the US dollar. Fresh investor demand for the US dollar worked against the Canadian unit as did disappointing employment figures, market watchers said.

The Canadian currency late in the afternoon was quoted at C$1.0830 (92.33 US cents). This compares with Thursday's late North American quote of $1.0779 (92.77 US cents).

Statistics Canada in its Labor force survey, said employment in Canada declined by 45,000 in July, with losses in both full- and part-time work. The unemployment rate remained unchanged at 8.6%, as fewer people participated in the labour market.

While most of July's employment losses were in Quebec, there were also losses in Saskatchewan, as well as in Newfoundland and Labrador. Employment was little changed in all other provinces.

Weakness in the resource-based Canadian currency was also attributed to the declines seen in global crude oil and gold values, brokers said.

Canadian bonds ended the session on the defensive with the sell-off in US Treasury issues behind the weakness, market watchers said.

News that the US economy shed a below-forecast total of 247,000 jobs in July keyed the bond market's slide Friday, although earlier news that Canadian job losses were above expectations at nearly 45,000 in the same month cushioned the Canadian market from selling off to the same extent as the Treasurys market.

Canada's calendar of economic data next week is limited to June merchandise trade balance statistics Wednesday and manufacturing sales for the same month Friday.