Economic hopes propel loonie up by more than 1 1/2 cents to six-month high

The Canadian dollar bulked up by more than 1 1/2 American cents Friday to a six-month high, lifted by brightening economic hopes supported by better-than-expected job data.

TORONTO — The Canadian dollar bulked up by more than 1 1/2 American cents Friday to a six-month high, lifted by brightening economic hopes supported by better-than-expected job data.

The currency jumped to 86.91 cents US late in the afternoon, a gain of 1.62 cents from Thursday’s close.

This was up from below 77 cents in the dark days of early March.

And it was the loonie’s highest level since it spiked up by more than two cents on Nov. 4 as Americans elected Barack Obama president — a gain the Canadian currency quickly surrendered as it resumed a decline from almost 97 cents last September and from parity a year ago.

Friday’s upward move came after Statistics Canada reported the economy added 35,900 jobs last month — confounding economist expectations that losses would continue for a sixth month, likely by 50,000.

A sharp early rise in the currency prompted Statistics Canada to investigate whether its data may have leaked before being officially released at 7 a.m. ET. The loonie spiked by almost three-quarters of a cent in thin trading during the hour before the release, and a spokesman said the agency was examining its procedures.

The currency was further bolstered by hopeful signs in Canada’s main export market, as the United States shed 539,000 jobs, the fewest in six months and far smaller than market expectations of 620,000 job cuts.

The loonie also got support from oil. The near-month crude contract was up $1.92 to US$58.63 a barrel on the New York Mercantile Exchange, continuing an upturn after trolling around the $50 range for more than month.

“Oil prices are being driven higher by optimism over economic recovery and in response to soaring equities and associated weakness in the U.S. dollar,” commented British energy consultancy KBC Market Services.

The economic numbers support the so-called “green shoots” thesis that recent data indicate signs of revival with the global economic downturn having hit bottom.

“Even before the employment numbers came out we were certainly seeing that the bias was for a stronger Canadian dollar and a weaker U.S. dollar,” said Camilla Sutton, currency strategist at Scotia Capital.

“All in all, we’re seeing that growth currencies like Canada are doing very well as commodities are having a good run, and the world is focusing on the potential that global growth comes back.”

TD Bank economist Diana Petramala cautioned that “the Canadian economy still has a lot of challenges ahead of it,” after what was likely its sharpest first-quarter contraction on record.

“While it is great news that job destruction halted in April, we shouldn’t put too much stock in one month of data,” Petramala commented. ‘During the ’90s recession it was not uncommon to have one or two months of large jumps in employment amidst several months of large-scale job losses.”

And Scotia’s Sutton noted that in wrenchingly volatile times, a currency forecast can be outdated before it’s even published.

“As everyone well knows after the last year, anything can change in a heartbeat,” she said. “However, this is a reasonable level for Canada to be trading at, and right now the trend does appear that we are moving toward a stronger Canadian dollar.”

CIBC World Markets chief economist Avery Shenfeld observed that the loonie’s seven per cent appreciation in the past month “promises to tighten competitive conditions for exporters at a time when Canada’s key customers are still struggling.”

Shenfeld added that the currency’s rise “hasn’t been sufficiently offset by improvements in either export prospects or commodity prices,” and “we’re betting that the C$ rally will let up on its own, given the drag from the trade balance and a likely stall in oil prices in the weeks ahead.”

Just Posted

Councillors want to represent Red Deer at AUMA

City council approves endorsement

Cannabis smoke raises health concerns

Smoke Free Bylaw returns to Red Deer city council Sept. 4

Avid Penhold climber Catlin Hannah’s death a reminder of the dangers of scrambling

Hannah never returned from his Mount Smuts attempt on Aug. 12.

Children, elderly at risk as smoke from distant fires hangs over parts of B.C.

VANCOUVER — Thick smoke blanketing British Columbia communities far from any flames… Continue reading

WATCH: Medicine River Wildlife Centre opens new playground

The grand opening of the playground was Saturday morning

Police chiefs want new data-sharing treaty with U.S. as privacy questions linger

OTTAWA — Canada’s police chiefs are pressing the Trudeau government to sign… Continue reading

Pope on sex abuse: “We showed no care for the little ones”

VATICAN CITY — Pope Francis issued a letter to Catholics around the… Continue reading

Ottawa announces $189M to extend employment insurance for seasonal workers

ESCUMINAC, N.B. — Ottawa has announced $189 million for an employment insurance… Continue reading

Trudeau formally announces he’ll run again in next year’s election

MONTREAL — Justin Trudeau will run again in the 2019 federal election.… Continue reading

Smoke from B.C. wildfires prompts air quality advisories across Western Canada

VANCOUVER — More smoky, hazy air is expected to blanket much of… Continue reading

Anti-pipeline protesters released days before weeklong jail sentences end

MAPLE RIDGE, B.C. — Several pipeline protesters were released from a British… Continue reading

All eyes on Andrew Scheer as Conservative convention set for Halifax

OTTAWA — After a week of internal caucus squabbles, Conservative Leader Andrew… Continue reading

Trump says his White House counsel not a ‘RAT’ like Nixon’s

BRIDGEWATER, N.J. — President Donald Trump insisted Sunday that his White House… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month