TORONTO: The Canadian dollar weakened against its US counterpart on Friday, giving back some of its weekly gain, as oil prices tumbled and domestic data showed the global trade war beginning to hurt the labour market.
The loonie was trading 0.7% lower at 1.4195 per US dollar, or 70.45 US cents, after trading in a range of 1.4054 to 1.4242.
It touched on Thursday its strongest intraday level since December 6 at 1.4025 as Canada avoided fresh tariffs on its goods. For the week, the loonie was up 0.9%.
Canadian employment fell by 33,000 in March, the first decrease in more than three years, and the unemployment rate edged up to 6.7% as the uncertainty around trade tariffs took a toll on hiring.
“It does feel like that we should see the labour sector come under a bit more strain in the coming months and that might require a bit more action from the Bank of Canada than the market was expecting,” said Bipan Rai, head of ETF and structured solutions strategy at BMO Global Asset Management.
Investors see a 65% chance the Bank of Canada would continue its interest rate cutting campaign at a policy decision on April 16, up from 50% before the data.
The price of oil, one of Canada’s major exports, tumbled 7.5% to $61.93 a barrel, adding to its steep decline the day before, as China hit back in an escalating global trade war with the United States.
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