Globe and Mail - Loonie closes with little change as market awaits jobs data

Thursday, 04 July 2013


The loonie closed nearly unchanged on Thursday as a clearer path was laid out for political developments in Egypt and traders turned to the coming jobs reports.The Canadian dollar was down 0.1 of a cent to 95.05 cents (U.S.).

U.S. markets were closed for the Independence Day holiday.

In Egypt, the country’s first democratically elected president, Mohammed Morsi, was removed from office by the armed forces, which gave some certainty to oil supply concerns.

While Egypt is not an oil producer, its control of the Suez canal – one of the world’s busiest shipping lanes, which links the Mediterranean with the Red Sea – gives it a crucial role in maintaining global energy supplies.

Crude futures were lower in late-afternoon electronic trading on the New York Mercantile Exchange. The regular trading session for the commodity will resume after the U.S. holiday.

“With oil trading back above $100, it would make sense to see the Canadian dollar strengthen but people are idle ahead of [Friday’s] double North American employment release,” John Curran, senior vice-president of CanadianForex Ltd. said in a note Thursday.

Jobs data from both the U.S. and Canada are anticipated to be stronger when they are released early Friday.

The U.S. government’s employment report is expected to show that the economy created 165,000 jobs, following a gain of 175,000 in May. The jobless rate is forecast to dip to 7.5 per cent from 7.6 per cent.

Economists believe Statistics Canada will say that the economy cranked out only about 5,000 jobs in June, following a surprisingly strong gain of 95,000 in May, with the unemployment rate remaining unchanged at 7.1 per cent.

Meanwhile, European Central Bank president Mario Draghi underlined the bank’s determination to stick with stimulus for the struggling euro zone, saying the bank will keep its benchmark interest rate the same or lower “for an extended period of time.”

And the Bank of England surprised markets after its first monetary policy meeting held under new Governor Mark Carney, saying it views inflation pressures as temporary, suggesting that it will keep its policies loose for the foreseeable future.

In Portugal, the governing coalition continued to look shaky, something that earlier this week raised the spectre of Europe’s debt crisis returning to a boil.

From The Globe and Mail

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