TORONTO, Oct 3 (Reuters) - The Canadian dollar lost nearly 1 percent against the greenback on Friday, coming within a hair of touching its low for 2014 under pressure from disappointing domestic data and better-than-expected U.S. jobs growth.
After two sessions of consolidation, the loonie slid decisively back through resistance at the C$1.12 level, making for a more than six-month low.
"It's a bit of a perfect storm for the currency," said Mazen Issa, senior Canada macro strategist at TD Securities in Toronto.
Canada unexpectedly posted a trade deficit in August as exports dropped, while imports rose by the highest amount in almost two years.
At the same time, U.S. job growth accelerated in September and the unemployment rate fell below 6 percent, giving the greenback a boost.
Canada will not release its jobs figures for September until next week. The loonie touched a session low of C$1.1271, bringing it within striking distance of 2014's low so far at C$1.1279, which was seen in March.
"We didn't quite get there (but) I don't think that takes anything away from the marketplace at this time," said Amo Sahota, director at Klarity FX in San Francisco.
"Everything is still lined up in that direction.After the head fake we got earlier in the week with the squeeze down toward C$1.1078, C$1.1080, the resumption for the path of least resistance is very, very prevalent."
The Canadian dollar ended the North American session at C$1.1259 to the greenback, or 88.82 U.S. cents, weaker than Thursday's close of C$1.1163, or 89.58 U.S. cents. The currency pairing likely still has higher to go, with technical targets though C$1.1280 up closer to C$1.1350, Sahota said.
The Canadian dollar gave up 0.9 percent for the week, its second week of declines in a row. The Canadian trade figures imply economic growth for the third quarter that is now in the low 2 percent area, when it had been previously tracking at 2.5 percent, said Issa.
"It's quite a dent in what expectations were for the quarter, but it certainly gives a lot of vindication for the Bank of Canada to have pounded the table, so to speak, on being cautious on the outlook," he said.
Recent comments from Bank of Canada officials have reinforced the market's view of the bank's neutral-to-dovish policy stance. The central bank will release its next policy statement later in the month, along with updated economic forecasts.
Canadian government bond prices were mostly lower across the maturity curve, with the two-year down 1-1/2 Canadian cents to yield 1.128 percent and the benchmark 10-year down 8-1/2 Canadian cents to yield 2.097 percent.
yahoo.com
After two sessions of consolidation, the loonie slid decisively back through resistance at the C$1.12 level, making for a more than six-month low.
"It's a bit of a perfect storm for the currency," said Mazen Issa, senior Canada macro strategist at TD Securities in Toronto.
Canada unexpectedly posted a trade deficit in August as exports dropped, while imports rose by the highest amount in almost two years.
At the same time, U.S. job growth accelerated in September and the unemployment rate fell below 6 percent, giving the greenback a boost.
Canada will not release its jobs figures for September until next week. The loonie touched a session low of C$1.1271, bringing it within striking distance of 2014's low so far at C$1.1279, which was seen in March.
"We didn't quite get there (but) I don't think that takes anything away from the marketplace at this time," said Amo Sahota, director at Klarity FX in San Francisco.
"Everything is still lined up in that direction.After the head fake we got earlier in the week with the squeeze down toward C$1.1078, C$1.1080, the resumption for the path of least resistance is very, very prevalent."
The Canadian dollar ended the North American session at C$1.1259 to the greenback, or 88.82 U.S. cents, weaker than Thursday's close of C$1.1163, or 89.58 U.S. cents. The currency pairing likely still has higher to go, with technical targets though C$1.1280 up closer to C$1.1350, Sahota said.
The Canadian dollar gave up 0.9 percent for the week, its second week of declines in a row. The Canadian trade figures imply economic growth for the third quarter that is now in the low 2 percent area, when it had been previously tracking at 2.5 percent, said Issa.
"It's quite a dent in what expectations were for the quarter, but it certainly gives a lot of vindication for the Bank of Canada to have pounded the table, so to speak, on being cautious on the outlook," he said.
Recent comments from Bank of Canada officials have reinforced the market's view of the bank's neutral-to-dovish policy stance. The central bank will release its next policy statement later in the month, along with updated economic forecasts.
Canadian government bond prices were mostly lower across the maturity curve, with the two-year down 1-1/2 Canadian cents to yield 1.128 percent and the benchmark 10-year down 8-1/2 Canadian cents to yield 2.097 percent.
yahoo.com
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