The euro gained 0.3% to $1.2055 while the dollar index, measured against a basket of currencies, was down 0.2% .
Real yields in the US remain deeply negative on a 10-year basis and reflect some of this uncertainty that will continue to limit the upside for the US dollar.
"We've confirmed that demand for Treasuries is healthy, which means there is no upward pressure on yields," said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo.
"The new spending is an upside to growth and could lead to the Bank of Canada raising rates earlier or faster than otherwise," Adam Cole, chief currency strategist at RBC Capital Markets in London, said in a note.
Investors were also looking ahead to a Bank of Canada interest rate decision on Wednesday. Analysts expect the central bank to announce it is cutting bond purchases from the current pace of C$4 billion per week.
The survey, conducted before new restrictions came into effect earlier this month to tackle a third wave, found sales were at or above pre-pandemic levels for 64% of businesses.
Still, nearly 20% of firms - many in high-contact services like tourism and non-essential retail - do not expect their sales to return to pre-pandemic levels in the next 12 months.
"Carolyn has a respected track record built over 20 years at the Bank of Canada and her extensive experience in international financial regulation will be a real asset to the FPC," British finance minister Rishi Sunak said.
The FPC sets capital ratios for British banks and insurers and regulates aspects of mortgage lending, as well as broader financial risks. Its remit does not extend to monetary policy or financial misconduct.
*The median forecast of more than 30 strategists was for the Canadian dollar to rise a further 0.6% over the next three months to 1.25 per US dollar, or 80 US cents.
* "We expect the Canadian dollar to be a general outperformer among the G10 over the coming year," said Erik Nelson, a currency strategist at Wells Fargo in New York.
The Canadian dollar was trading 0.4pc lower at 1.2633 to the greenback, or 79.16 U.S. cents, having touched its weakest level since March 10 at 1.2646.
With the addition of 259,200 jobs in February, Canada recouped nearly all the losses of the previous two months and beat the average analyst prediction of 75,000 new jobs.
Employment remains 3.1% below pre-pandemic levels, while the number of long-term unemployed fell by 9.7% from a record high of 512,000 in January.
The rally in oil has been supportive of the Canadian dollar. Since the start of the year, the loonie has gained 0.7%, trailing just sterling and the Norwegian crown among G10 currencies.
The BoC has signaled that interest rates will stay at a record low of 0.25% until 2023, when it expects the economy to reach its potential.
"They have to acknowledge that the outlook is better," said Andrew Kelvin, chief Canada strategist at TD Securities. "At the same time they don't want to encourage runaway expectations for near-term rate hikes."
The consensus of the March 1-5 poll predicted the BoC would keep its key interest rate on hold at 0.25% through to the end of next year, unchanged from the previous poll.
More than 70% of poll participants, or 15 out of 21, who responded to an additional question, said the central bank would taper its asset purchases programme as its next move.
The seasonally adjusted index rose to 48.4 from 46.7 in December. A reading below 50 indicates decreasing activity.
The Ivey PMI measures the month-to-month variation in economic activity as indicated by a panel of purchasing managers in the public and private sectors from across Canada.
Affordability remains a concern. When asked to assess house prices on a scale of 1 to 10, where 1 is cheap and 10 is expensive, respondents rated national, Toronto and Vancouver at 7, 8 and 9, respectively.
The central bank, outlining its quarterly economic forecasts, said that despite the stronger outlook it does not expect inflation to return sustainably to target until 2023.
The medium-term outlook is stronger than in the October Report because of the positive effects from vaccines, greater fiscal stimulus, stronger foreign demand and higher commodity prices.
The Chinese yuan clung to modest gains in offshore trade at 6.4757 to the dollar ahead of a monthly interest rate fixing where traders expect no change in either one-year or five-year loan prime rates.