C$ rebounds from 8-day low as investors shrug off jobs decline

TORONTO: The Canadian dollar strengthened against its US counterpart on Friday as oil prices rose and investors weighed US and Canadian employment data, with the currency recovering from its weakest intraday level in more than one week.

Canada lost 68,000 jobs in May, a bigger decline than expected, as lockdowns imposed to curb a harsh third wave of COVID-19 continued to weigh on the economy, Statistics Canada data showed.

"Below the surface, the number is a little bit better than it looks and overall the Canadian dollar isn't going to be flustered by a lockdown-induced soft number," said Adam Button, chief currency analyst at ForexLive.

The US dollar lost ground against a basket of major currencies. Data showed US employers boosted hiring in May as the easing pandemic pulled more people back into the labor force but at a pace that was less than expected.

The Canadian dollar was trading 0.3% higher at 1.2079 to the greenback, or 82.79 US cents. Earlier in the session, the currency touched its weakest level since May 27 at 1.2133.

Analysts have raised their forecasts on the high-flying commodity-linked Canadian dollar as a proposed infrastructure spending package in the United States bolsters prospects for the global economy, a Reuters poll showed.

The price of oil, one of Canada's major exports, was up 0.9% at $69.44 a barrel as OPEC+ supply discipline and recovering demand countered concerns about patchy COVID-19 vaccination rollout around the globe.

Canadian government bond yields fell across a flatter curve, tracking the move in US Treasuries. The 10-year was down 2.1 basis points at 1.499%.