Loonies are pictured in Vancouver on Sept. 22, 2011JONATHAN HAYWARD/The Canadian Press
The Canadian dollar closed sharply lower Friday amid a huge miss in expectations for job creation last month.
The loonie ended down 0.42 of a cent at 91.15 cents (U.S.) as Statistics Canada reported that the economy created a paltry 200 jobs during July. Economists had generally expected that 20,000 jobs would be created.
The jobless rate dipped 0.1 of a percentage point to 7.0 per cent.
Traders were risk-averse amid a number of geopolitical flashpoints and that also weighed on the loonie.
Traders bought into U.S. Treasuries and the yield on the benchmark 10-year bond stood at 2.42 per cent, down from 2.43 per cent late Thursday, which was already the lowest level of the year. The yield went as low as 2.37 per cent before rising after Russia's Interfax reported that Russia had ended military exercises near the Ukraine border.
The Russia/Ukraine standoff was the primary focus for investor worry this past week as traders considered the odds of Russia invading its neighbour in order to prop up Ukrainian rebels. There is also concern about how sanctions and countersanctions could derail a still-fragile economic recovery in Europe.
Barclays Research noted that there are "fears that Russia may widen its ban on agricultural imports to include the car, shipping, and aerospace sectors" after announcing a ban in food imports from the West.
Meanwhile, President Barack Obama authorized U.S. air strikes in northern Iraq, warning that they would be launched to defend American troops and civilians under siege from Islamic State militants.
On top of this, there was a breakdown in the ceasefire between Israel and Hamas in Gaza.
Gold prices turned lower after two days of gains with the December bullion contract in New York down $1.50 to $1,311 an ounce.
Elsewhere on the commodity markets, September crude in New York gained 31 cents to $97.65 a barrel and August copper was unchanged at $3.18 a pound.
There didn't seem to be much reaction to positive Chinese data. Exports jumped 14.5 per cent from a year earlier, double June's 7.2 per cent growth, customs data showed Friday. However, imports fell 1.6 per cent, down from the previous month's 5.5 per cent expansion.
The decline in July imports exceeded analyst forecasts and was a sign domestic economic activity might be weakening. So far this year, imports are down 0.8 per cent from the same period last year.