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Canadian Dollar Spikes Up On Better Employment Report

5/11/2012 9:12 AM ET

The Canadian dollar jumped against other major currencies on Friday's trading after a report showed that the country added more jobs in April.

Statistics Canada said the economy generated 58,000 jobs in April, mostly in full-time work. However, with more people searching for work, the unemployment rate increased by 0.1 percentage points to 7.3 percent. Compared with 12 months earlier, employment was up 1.2 percent or 214,000.

After touching 2-day low of 1.0056 against the U.S. dollar in the European session, the loonie climbed after the release of jobs data. The loonie is now trading at 1.0000 against the greenback, compared to Thursday's close of 1.0023. If the loonie rises further, it may target 0.995 level.

With energy prices showing a notable decrease in the month of April, the Labor Department released a report today showing an unexpected drop in producer prices for the month.

The Labor Department said its producer price index fell by 0.2 percent in April after coming in unchanged in March. Economists had expected the index to remain flat for the second straight month.

The loonie touched an 8-day high of 1.2921 against the euro, compared to a 2-day low of 1.3016 hit at 6:10 am ET. On the upside, the loonie may target 1.29 level. At yesterday's close, the pair was worth 1.2967.

Although Eurozone has entered a technical recession, a recovery is in sight, the European Commission said in its Spring forecast, published today. With transitory shocks waning and confidence rebounding, overall EU is expected to return to a subdued growth path.

A gradual recovery is forecast to begin in the second half of the year and gather momentum in 2013. However, downside risks to the GDP forecast continue to prevail, the executive arm of the 27-nation bloc said.

Against the Australian dollar, the loonie approached a new 7-month high of 1.0032 with 1.00 seen as the next upside target level. The pair closed yesterday's deals at 1.0106.

The loonie is now trading at 80.02 against the yen, up from an early 2-day low of 79.38. The next upside target level for the loonie is seen at 79.00. The loonie-yen pair finished Thursday's trading at 79.79.

Looking ahead, the Reuters and the University of Michigan's preliminary report on consumer sentiment index for May is due shortly.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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