Canadian dollar rises as job creation figures come in better than expected

TORONTO – The Canadian dollar was higher Friday after job creation data for Canada and the United States came in better than expected.

The loonie was up 0.23 of a cent to 101.13 cents US as Statistics Canada reported that the economy added 59,000 jobs last month, while the jobless rate dropped by 0.2 of a point to 7.2 per cent.

Economists had expected a smaller increase of about 10,000 jobs last month, following a minimal gain of 1,800 in October.

The news was equally surprising in the United States, where economists had expected a lacklustre report with job creation impacted by superstorm Sandy.

But the U.S. Labour Department said the economy cranked out 146,000 jobs in November, with the jobless rate decreasing 0.2 of a point to 7.7 per cent. On a less positive note, U.S. job gains for the previous two months were ratcheted down by 49,000.

Meanwhile, oil prices moved into negative territory on the latest bout of pessimism surrounding the so-called “fiscal cliff”.

That is the term used to describe the scenario when substantial tax increases and spending cuts will be automatically triggered at the beginning of January unless Republicans and Democrats can come to an agreement. The worry is that the moves would immediately cut into economic growth, likely sending the U.S. into recession and taking other world economies along with it.

The widely-watched University of Michigan’s measure of consumer confidence fell to a four-month low of 74.5 in December, from 82.7.

And later in the morning, House Speaker John Boehner accused President Barack Obama of wasting another week in trying to arrive at a deal.

The Republicans are resisting tax hikes but Obama has made it clear that taxes will have to go up for wealthiest taxpayers.

The January crude contract on the New York Mercantile Exchange lost 24 cents to US$86.02 a barrel, adding to the losses of the previous three sessions.

March copper was ahead two cents at US$3.67 a pound while February gold bullion drifted 20 cents lower to US$1,701.60 an ounce.