The central bank is likely to cut its bond-buying program again this year, possibly as soon as July, as provinces ease curbs to contain the coronavirus pandemic and inflation pressures build, analysts said.
Investors have worried that the heating up of the U.S. economy could raise the outlook for inflation, prompting the Federal Reserve to tighten monetary policy.
Statscan also said March retail trade rose by 3.6% from February, thanks in part to higher sales at building material and garden equipment and supplies dealers. Analysts in a Reuters poll had forecast a 2.3% increase.
The Canadian dollar, which has been flirting with six-year highs against the US dollar, held onto earlier gains and was trading up 0.1% on the day at C$1.2040 to the greenback, or 83.06 US cents.
Canada has tapped an international bond market for the first time since before the coronavirus crisis, selling $3.5 billion of a 5-year US dollar global bond in a move that could pad its foreign exchange reserves, a term sheet showed.
"Traders are Gamestopping the Canadian dollar, bidding it in synchrony with soaring base metal prices," said Schamotta, referring to the US stock that was propelled by retail traders to record highs.
Analysts expect Canada's employment report on Friday to show the economy shed 175,000 jobs in April as restrictions were tightened in some provinces to contain the coronavirus pandemic.
Canada's trade deficit with the world was C$1.1 billion ($892.21 million) in March. Analysts polled by Reuters had predicted a surplus of C$700 million after a revised C$1.42 surplus in February.
Exports to the United States fell 3.8% in March, while imports rose 5.2%. Canada's trade surplus with the US, it's largest trading partner, narrowed in March to C$4.3 billion.
The Canadian dollar was trading 0.1% higher at 1.2272 to the greenback, or 81.49 US cents, having traded in a range of 1.2266 to 1.2317. On Friday, it touched its strongest intraday level since February 2018 at 1.2262.
The dollar index was set to end the week flat, although still down 2.56% for the month as a whole.
Higher 0.2% on the day by midday in London, it had been on track for a four-week losing streak during Asian trading, which would have been the longest fall since a six-week slide to the end of last July.
In contrast, the Federal Reserve on Wednesday said it was too early to consider rolling back emergency support for the economy, pressuring the US dollar.