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Canada’s Dollar Slips on Crude Oil & US Jobs Market

June 4, 2011 at 4:08 by Vladimir Vyun

Canadian DollarThe Canadian dollar dropped today as crude oil declined after the report showed that the US employers added far less jobs than was anticipated by analysts and traders.

Crude oil, the main Canada’s export, fell 0.2 percent yesterday and 0.4 percent over this week. The unfavorable payrolls and the rising unemployment claims had their negative effect on prices for crude, as well as on the outlook for Canada’s economy. The attention of Forex traders shifted from the European Union to the US, and what they see isn’t good for the Canadian currency.

The outlook for the situation with the European debt, while not improved noticeably, at least stopped causing markets distress. And that can be positive for the loonie as a higher-yielding currency. The news from the US weren’t all bad as the services PMI grew to 54.6 in May from 52.8 in April. But the bad news had upper hand over the good news just by the virtue of their sheer number and the Canadian dollar was loser this week.

USD/CAD closed at 0.9775 after opening at 0.9757 and climbed as high as 0.9850, while CAD/JPY closed at 81.99 after it opened at 82.84 and tumbled to 81.32. As we can see, the loonie was able to recover somewhat against the greenback and the yen, but the currency was falling against the euro almost without pause. EUR/CAD surged to 1.4310 from 1.4138.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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