Canadian Dollar Erases Daily Gains

The Canadian dollar retreated, losing its initial gains, after the report showed that the Canadian employment declined instead of rising as was predicted and the unemployment rate unexpectedly increased.

The Canadian employment was expected to rise by 18,100 jobs, but instead it decline by almost the same amount (18,600 on the seasonally adjusted basis) in November. The unemployment rate edged up from 7.3 percent to 7.4 percent, while market participants hoped it to stay unchanged.

Earlier, the loonie (as Canada’s currency is nicknamed) gained on the rumors about the proposal of the European governments to channel loans for supporting the Euro-region through the International Monetary Fund. The European central banks are forbidden to directly finance the nations’ budget, but directing money to the most-indebted nations through the IMF would allow the banks to help the battle with the debt crisis without violating the rules. The rumors speak about as much as â‚¬200 billion that may be channeled through the IMF to the debt-laden European countries.

USD/CAD advanced from 1.0137 to close at 1.0191, following the earlier drop to 1.0078. CAD/JPY fell from 76.58 to the closing price of 76.40, while intraday it reached 77.33, the highest rate since November 4.

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