Canadian Dollar Erases Advance as Fewer Jobs Added Than Analysts Forecast
Canada’s dollar erased its gain after a government report showed employers added fewer jobs in December than economists forecast and the unemployment rate rose for a third straight month.
“Disappointing report overall,” said Camilla Sutton, head of currency strategy at Bank of Nova Scotia, by phone from Toronto. “Soft details combined with a miss on the expectation suggests that there are increasing internal headwinds for the Canadian economy. The Canadian dollar has weakened.”
The Canadian currency depreciated less than 0.1 percent to C$1.0201 per U.S. dollar at 7:11 a.m. Toronto time after earlier rising 0.3 percent. One Canadian dollar buys 98.03 U.S. cents.
The jobless rate increased to 7.5 percent from November’s 7.4 percent and the recent low of 7.1 percent in September, Statistics Canada said today in Ottawa. Employment rose by 17,500 in the first gain in three months. The median forecast of 24 economists in a Bloomberg News survey of analysts and economists was for an increase of 20,000.
Economic growth will slow to 2 percent this year from 2.3 percent in 2011, according to the median forecast in a separate Bloomberg News survey last month. The 2012 forecast decreased 0.1 percentage point from the November survey.
...................................................................
Pound Reaches 15-Month High Against the Euro; Gilts Decline on U.S. Jobs
The pound reached the highest in 15 months against the euro, heading for a fifth weekly gain, after a European Central Bank Governing Council member said Germany is the biggest obstacle to increasing the region’s bailout fund.
Gilts fell as stocks rose before a report economists forecast will show hiring in the U.S. accelerated last month. Payrolls climbed by 155,000 workers after rising 120,000 the previous month, according to the median forecast of 84 economists surveyed by Bloomberg News. Data this week showed overseas investors boosted their U.K. government bond holdings by the most in three years in November.
“The pound is underpinned by demand for sterling assets while the euro region is still a trouble spot,” said Geoffrey Yu, a currency strategist at UBS AG in London. “The benefit of the pound is that the U.K. is not in the euro zone.”
The pound climbed to 82.39 pence per euro, the strongest since Sept. 10, 2010, before trading little changed at 82.63 pence as of 12:13 p.m. London time. Sterling was also little changed at $1.5584 and 119.41 yen. The currency gained 0.9 percent against the euro from last week.
Euro Obstacles
Sterling has risen 3.2 percent against a basket of nine developed-market peers in the past six months, making it the third-best performer after the Japanese yen and the U.S. dollar, according to Bloomberg Correlation-Weighted Indexes.
ECB Governing Council member Klaas Knot said Germany should support raising the European emergency fund to help end the region’s debt crisis.
“The most important obstacle lies in Germany, not in the Netherlands,” Knot said in an interview on Dutch public television last night. “More money is needed and we will use the time to convince our German colleagues.”
U.K. government bonds fell alongside U.S. Treasuries and German securities ahead of the U.S. jobs data that will be published at 8:30 a.m. in Washington. A report yesterday from ADP Employer Services showed companies added 325,000 workers in December, more than the 178,000 increase forecast by economists in a Bloomberg survey, and the most since the series began in 2001.
