By Commodity News Service Canada
WINNIPEG, March 13 – The Canadian dollar dropped sharply relative to the US dollar on Friday, undermined by weakness in the crude oil market, analysts said.
Crude oil values were just above the US$45.00 per barrel mark on Friday, a drop of more than four per cent. The decline in oil values renewed worries about the negative impact it could have on Canada’s economy.
The Canadian dollar closed at US$0.7819 or US$1=C$1.2790 on Friday, which compares with Thursday’s North American settlement of US$0.7872 or US$1=C$1.2703.
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Continued speculation that the US Federal Reserve will raise interest rates in June was also bearish for the Canadian dollar.
News that Canada’s unemployment rose in February also undermined the loonie. Statistics Canada said the unemployment rate rose 2 percentage points to 6.8 per cent.
Though, StatsCan also said 1,000 jobs were lost from the economy in February, which beat pre-report expectations calling for a loss of 5,000 jobs.
Canadian bonds moved higher on Friday, taking direction from the gains seen in the US Treasury market, according to participants.
The two-year bond yielded 0.553% Friday, from 0.576% late Thursday. The 10-year bond yielded 1.477%, from 1.494%. Bond yields rise as their prices fall.
