Canada's dollar fell for a second day as crude oil retreated from near a five-week high, raising speculation the nation's economy may get less support from commodity exports.
Crude oil is among the commodities that make up about half of Canadian exports. A report Sept. 7 showing U.S. job growth shrank for the first time in four years raised concern the U.S. economy may head into recession, cutting demand for Canadian goods. Canada ships 80 percent of its products to the U.S.
``Oil is definitely not helping the Canadian dollar,'' said Christian Dupont, a senior currency trader at Societe Generale SA in Montreal. ``The Canadian dollar has been struggling after the U.S. payroll data. There is fear of contagion from U.S. to Canada.''
Canada's dollar fell to 94.61 U.S. cents at 8:50 a.m. in Toronto from 94.78 U.S. cents on Sept. 7. One U.S. dollar buys C$1.0567. The currency has fallen about 1 percent since July 25, when it reached a 30-year high, as losses on U.S. subprime debt spread to Canada and Europe, threatening to derail a global economic expansion.
Crude oil futures for October delivery dropped 79 cents, or 1 percent, to $75.91 a barrel, in electronic trading on the New York Mercantile Exchange.
The Canadian dollar weakened 0.3 percent on Sept. 7 after the U.S. Labor Department said the economy lost 4,000 jobs last month, the first decline in four years. A survey of economists forecast 100,000 new jobs.
Losses in the Canadian dollar were limited before a report tomorrow that is forecast to show housing starts in Canada rose to an annualized pace of 220,000 last month from 215,600 a month earlier.
Canada's economy added 23,300 jobs last month after creating 11,300 positions in July, Statistics Canada said Sept. 7. Analysts expected 18,000 new jobs in August, according to the median forecast of 25 economists surveyed by Bloomberg News. The unemployment rate held at 6 percent.
The yield on the benchmark 10-year bond was little changed at 4.28 percent. The price of the 4 percent security due June 2017 fell 1 cent to C$97.78. Bond yields move inversely to prices.