Canadian dollar rises, jobless rate falls to lowest level since Dec., 2008

TORONTO – The Canadian dollar closed higher Friday as job creation for September narrowly beat modest expectations and the unemployment rate fell to the lowest level since December 2008.

The loonie was up 0.39 of a cent to 96.58 cents US.

Statistics Canada said job creation came in at 11,900 last month while the jobless rate fell 0.2 of a point to 6.9 per cent as fewer young people looked for work. Economists had been looking for the economy to have created about 10,000 jobs, after cranking out almost 60,000 in August.

The dollar’s rise came amid the release of a survey indicating that sluggish global economic growth is weighing on plans by Canadian business to ramp up hiring and investment.

The Bank of Canada’s Business Outlook Survey showed that there were almost as many companies saying they planned to cut back on spending on new machinery and equipment over the next 12 months as those saying they were looking to increase it.

Meanwhile, financial markets were primarily focused on negotiations aimed at extending the U.S. debt limit.

Republican House Speaker John Boehner on Thursday proposed extending the debt limit through Nov. 22, conditioned on President Barack Obama agreeing to negotiate over spending cuts and the government shutdown.

Since then, Obama has met with Republican and Democrat House and Senate leaders, raising hopes that the U.S. will avoid a possible default after the current borrowing limit expires on Oct. 17.

Oil prices fell with the November crude contract on the New York Mercantile Exchange down 99 cents to US$102.02 a barrel.

December copper was ahead two cents at US$3.27 a pound while December gold bullion faded $28.70 to US$1,268.20.