Canadian dollar weakens 0.7 against the greenback
Touches its weakest since Nov. 24 at 1.3644
Canada sheds 2,200 jobs in March
CanadaU.S. 2year spread widens to 56 basis points

TORONTO, April 5 Reuters The Canadian dollar weakened to a fourmonth low against its U.S. counterpart on Friday as domestic data showing a surprise decline in jobs raised expectations the Bank of Canada would begin cutting interest rates in June.

Canada39;s economy shed 2,200 jobs in March, missing estimates for a gain of 25,000, while the jobless rate increased to a new 26month high of 6.1.

Today39;s data confirms that the Canadian economy isn39;t as strong as official GDP data and the BoC are making out, and that substantial rate cuts are needed, said Simon Harvey, head of FX analysis for Monex Europe and Monex Canada.

As markets come around to this inevitability and start to price increasingly diverging paths for the BoC and Fed, it should lead USDCAD up to our 3month forecast of 1.38.

Investors see a roughly 80 chance the Canadian central bank would begin cutting rates in June, up from 68 before the data. A June start to rate cuts was also the view of the majority of economists in a Reuters poll.

The Canadian dollar was trading 0.7 lower at 1.3630 to the U.S. dollar, or 73.37 U.S. cents, after touching its weakest level since Nov. 24 at 1.3644.

Separate data showed U.S. job growth beating expectations, boosting the U.S. dollar against a basket of major currencies.

The price of…