Loonie drops after disappointing Canadian unemployment data, Chinese reports

TORONTO – The loonie weakened Friday morning after Statistics Canada reported the country lost 30,400 jobs last month, mostly part-time positions.

The dollar moved back 0.46 of a cent to 100.35 cents US.

Statistics Canada reported that the country’s unemployment rate rose one-tenth of a point to 7.3 per cent in July as the economy shed jobs rather than adding 6,000 positions as analysts had expected.

“There was a rise in full time employment, but that was it for the good news,” said CIBC economist Avery Shenfeld in a note.

“Large declines in employment in wholesale (and) retail trade, and job losses in manufacturing, resources and the public sector, contributed to the weakness in the headline figure.”

The state of China’s economy has also taken focus after a round of dismal trade data from the world’s second largest economy.

Chinese trade data for July showed exports rose just one per cent over a year earlier, sharply below forecasts of five per cent, while import growth fell to 4.7 per cent from the previous month’s 6.3 per cent, also below expectations.

The trade surplus with the 27-nation European Union, China’s biggest trading partner, narrowed by 37.9 per cent to $10.8 billion, reflecting sluggish demand in Europe, which is wrestling with a debt crisis and recession.

The figures come a day after China reported a slowdown in auto sales and factory output, are likely to heap the pressure on Beijing to take more measures to boost economic growth.

In commodities, the September crude contract on the New York Mercantile Exchange was down $1.56 to US$91.80 a barrel.

September copper moved down 5.9 cents to US$3.366 a pound while December gold fell $9.50 to US$1,610.70 an ounce.