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Loonie surges amid strong Canadian jobs growth, questions about Fed tapering

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(Globalpost/GlobalPost)

TORONTO - The Canadian dollar spiked almost a full US cent Friday amid mixed jobs data released in Canada and the United States.

The loonie jumped 0.89 cents to 96.07 cents US as the loonie found some support from Statistics Canada data showing that the economy created 59,000 jobs last month. That exceeded expectations of about 20,000 positions but the growth was mainly for part-time employment.

The unemployment rate fell to 7.1 per cent in August from 7.2 per cent in July.

The loonie also rose as the American dollar backed off after the U.S. Labor Department reported jobs growth of 169,000 last month, narrowly missing expectations of about 175,000 jobs.

The greenback fell back as doubts emerged about whether the U.S. Federal Reserve will start to wind up a key stimulus measure.

The Fed has indicated it could start winding up its US$85 billion of bond purchases as early as this month if the economy shows sufficient strength. The prospect of the Fed tapering those asset purchases has unnerved some investors as the stimulus has kept rates low and channelled money into equity markets around the globe.

Meanwhile, jitters remained over Syria’s civil war and whether the U.S. would launch a punitive strike against President Bashar Assad’s regime for a chemical attack against civilians in suburban Damascus last month.

President Barack Obama says he will address Americans about Syria on Tuesday while he seeks public support and congressional authority for military action against the Mideast country.

A congressional vote on such a strike could take place as early as next week.

Markets were rattled earlier after Russian President Vladimir Putin told a news conference at the end of the G20 summit in St. Petersburg that his country would continue to "assist" Syria even if the Mideast country is attacked.

Commodity prices were higher as worries about supply disruptions from the Mideast helped push the October crude contract on the New York Mercantile Exchange ahead $2.16 to US$110.53 a barrel, its highest close since May, 2011.

December copper rose two cents to US$3.26 a pound,.

Gold prices advanced after the release of the jobs data with the December bullion contract up $13.50 to US$1,386.50 an ounce.

http://www.globalpost.com/dispatch/news/the-canadian-press/130906/loonie-jumps-almost-cent-us-jobs-data-raises-questions-about