TORONTO: The Canadian dollar extended its weekly decline against the US dollar on Friday as investors weighed domestic and US employment data as well as recent events in Venezuela which resulted in a more uncertain outlook for Canada’s oil exports.
The loonie was trading 0.2 percent lower at 1.3895 per US dollar, or 71.97 US cents, after touching its weakest intraday level since December 5 at 1.3906. For the week, the currency was headed for a decline of 1.2 percent, which would be its biggest weekly loss since February last year.
“The geopolitical events in Venezuela have been weighing on the Canadian dollar most of this week as US control of their energy sector will present longer-term structural risk for Canada’s heavy oil export markets,” said George Davis, chief technical strategist at RBC Capital Markets.A boost in Venezuelan oil exports could hurt Canadian companies that sell a similar heavy oil if Venezuelan crude diverts to the United States.
Canada created just 8,200 new jobs in December after three months of outsize gains and the unemployment rate rose to 6.8 percent from 6.5 percent as more people searched for work. Analysts had expected a loss of 5,000 positions and the jobless rate to edge up to 6.6 percent.
“Today’s Canadian employment report was more of a neutral factor for the currency as the stronger than expected job gains were partially offset by an increase in the unemployment rate,” Davis said.
“However, with the US employment report failing to show a more pronounced slowdown there, the odds of a Fed cut in January slumped, lending broader-based support to the USD.”
The US dollar added to recent gains against a basket of major currencies, while the price of oil, one of Canada’s major exports, rose 2.7 percent to USD59.31 a barrel on concerns about potential disruption to Iran’s output and uncertainty about Venezuelan supply.
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