The Euro to Canadian Dollar (EUR/CAD) exchange rate made gains on Friday as economic data released in the North American nation showed that employers unexpectedly ditched jobs in December. The ‘Loonie’ was the only major currency that the Euro was able to advance against as Eurozone data also came in poorly.
Data released by statistics Canada showed that employment in the nation fell for a second consecutive month in December as a drop of 4,300 jobs combined with 11,200 people choosing to leave the workforce altogether. The overall unemployment level held steady at 6.6%. Economists had been expecting for the number of jobs to rise by 15,000 and the unemployment rate to remain unchanged.
The sharp decline in oil prices has played a significant part in weakening the Canadian economy over the past few months. ‘Black gold’ is the nation’s most exported commodity and as such, the weakening in prices has weighed heavily.
Oil Prices Fall Again
The Canadian currency was also dragged lower by another drop in oil prices. Oil is now on course to make a seventh weekly decline as speculation rises that OPEC will not reduce its productivity to reduce a glut in global supplies. Prices are now at the lowest level since April 2009.
‘The price war continues and there’s a great deal of excess supply. The statements from the U.A.E ambassador show that they are doubling down and taking no prisoners. This will be a long though fought war and they have the Saudis behind them,’ said Phil Flynn, senior market analyst at the Price Futures Group in a phone interview with Bloomberg news.
Canada’s biggest bank is also planning to cut its 2015 forecast for the ‘Loonie’. The currency has fallen by 3.4% since the end of November last year.
‘We’ve got the generally strong US Dollar, we’ve got oil prices teetering around $50 a barrel, and we’ve got some concerns about the Canadian economy. Canada’s dollar has “gone well beyond where we thought we’d be for 2015. We’ve got to go back and look at our forecasts,’ said Shaun Osborne, chief currency strategist at Toronto-Dominion Bank.
The G-7’s largest crude exporter has seen the value of energy shipments drop for six straight months, triggering a November trade deficit of $644 million, down from a surplus of $2.04 billion in July.
Euro Exchange Rate News:
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