Canadian dollar strengthens following release of disappointing U.S. jobs data

TORONTO – The Canadian dollar was flat as U.S. job creation figures came in worse than expected.

The U.S. Labour Department reported that the economy created 162,000 jobs during July, less than the 183,000 that markets had expected. However, the jobless rate ticked down to 7.4 per cent from 7.6 per cent.

The Canadian dollar was unchanged at 96.64 cents US, well off the worst levels of the morning. The loonie had been lower earlier but the U.S. currency weakened somewhat as the jobs data raised questions about when the Federal Reserve can let up on a key stimulus measure, its monthly US$85 billion of bond purchases.

The data also showed sharp revisions to the previous two months, as the Labor Department said 26,000 fewer jobs were created.

Traders have come to expect that the Fed would start to taper its bond purchases starting in September. But the Fed has been consistent in saying that such a cut in purchases would only take place if the economy showed sufficient strength.

Canadian employment data for July is released Aug. 9.

Commodities were mixed as the September crude contract on the New York Mercantile Exchange moved down 57 cents to US$107.32 a barrel.

September copper rose for a third day, ahead two cents to US$3.19 a pound. And December gold shed early losses following the release of the jobs report and headed up $1.60 to US$1,312.80 an ounce.