Loonie falls as U.S. jobs data mixed

TORONTO — The Canadian dollar closed lower Friday as U.S. job creation figures came in worse than expected.

The U.S. Labor 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 down 0.39 of a cent at 96.25 cents US after going as low as 96.14 cents US. The loonie had lost almost 3/4 of a cent Thursday amid a strong reading on the U.S. manufacturing sector.

The jobs data raised questions about when the U.S. Federal Reserve can let up on a key stimulus measure, its monthly $85 billion US 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 take place only if the economy showed sufficient strength.

The loonie lost about 1.1 US cents this past week and further declines could be registered next week.

“The U.S. dollar has rallied against almost everything over the past week and should carry that momentum in to next week despite a mildly disappointing employment report,” said Greg Anderson, Global Head of FX Strategy at BMO Capital Markets.