C$ recoups weekly decline as oil rally offsets job losses

TORONTO: The Canadian dollar rose against its US counterpart on Friday, clawing back its decline over the week, as higher oil prices offset domestic data showing the economy lost far more jobs than expected in January.

The loonie was trading 0.3% higher at 1.2781 to the greenback, or 78.24 US cents, having traded in a range of 1.2780 to 1.2832. For the week, the loonie was nearly unchanged.

Canada shed 212,800 jobs in January, the largest monthly decline since April 2020, missing analyst estimates of a loss of 47,500 jobs, Statistics Canada data showed. Economists said a lot of the weakness was temporary after lockdowns were implemented to contain the coronavirus pandemic.

Separate data showed a rise in Canada's exports and a drop in its imports in December, with the country's trade deficit with the world narrowing more than expected to C$1.7 billion ($1.3 billion).

Global shares approached record highs while oil, one of Canada's major exports, topped recent milestones, as progress in vaccine distribution and US stimulus hopes prompted bets on further normalization in the global economy.

US crude prices were trading at their highest since last January, up 1.7% at $57.17 a barrel, while the US dollar lost ground against a basket of major currencies.

Still, the greenback was headed for its best weekly gain since September, as confidence grew that the US economic recovery will outpace that of its global peers. Data showed US nonfarm payrolls increased by 49,000 last month.

Canadian government bond yields were higher across much of a steeper curve, with the 10-year up 4 basis points at 1.004%. It touched its highest intraday level since last March at 1.018%.