TORONTO – The Canadian dollar was higher after job creation data for Canada and the United States came in better than expected.
The loonie was up 0.24 of a cent to 101.14 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 U.S., 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, job gains for the previous two months were ratcheted down by 49,000.
Meanwhile, commodities generally improved in the wake of the U.S. jobs data.
Oil prices shook off early losses after demand concerns helped push oil down the previous three sessions, with the January crude contract on the New York Mercantile Exchange up 36 cents to US$86.62 a barrel.
March copper was ahead two cents at US$3.67 a pound while February gold bullion dropped $9.50 to US$1,692.30 an ounce.
Attention on markets will continue to be directed at what steps U.S. politicians are taking to avoid falling over the “fiscal cliff” at the end of December, when substantial tax increases and spending cuts will be automatically triggered. 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.
President Barack Obama wants to raise $1.6 trillion in revenue over the next 10 years, partly by letting decade-old tax cuts on the country’s highest earners expire at the end of the year.
He would continue those Bush-era tax cuts for everyone except individuals earning more than $200,000 and couples making above $250,000.
House Speaker John Boehner has offered $800 billion in new revenues to be raised by reducing or eliminating unspecified tax breaks on upper-income people.