Canadian dollar snaps weekly losing streak after jobs gain

Canadian dollar weakens 0.2% against the greenback

For the week, the loonie gains 0.2%

Price of U.S. oil settles 3.6% higher

10-year yield touches a seven-week high

TORONTO, – The Canadian dollar weakened against its U.S. counterpart on Friday as the greenback notched broad-based gains, but the loonie still notched a modest weekly advance as domestic jobs data cooled bets on a Bank of Canada rate cut this month.

The loonie was trading 0.2% lower at 1.4425 to the U.S. dollar, or 69.32 U.S. cents, after moving in a range of 1.4376 to 1.4442.

For the week, the currency was up 0.2%, after six straight weekly declines. It touched a near five-year low of 1.4467 on Dec. 19.

“It’s not Canada’s fault,” said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC. “I’d say the real theme is U.S. exceptionalism, or U.S. outperformance.”

The U.S. dollar rallied across the board after data showed the American economy created more jobs than expected last month, reinforcing expectations the Federal Reserve will pause its rate-cutting cycle.

Market participants are trying to determine whether the sideways pattern for USD-CAD since mid-December is a sign of a top or the base from which the pair takes another leg higher, Chandler said, adding “I think we’re going to get another leg up.”

Canada’s economy added 90,900 jobs in December, eclipsing forecasts for a 25,000 increase.

Investors see a roughly 60% chance of a BoC interest rate cut at a policy decision on Jan. 29, down from 71% before the data. For the full year, the amount of expected easing was slashed to 46 basis points from 61 basis points.

The price of oil, one of Canada’s major exports, settled 3.6% higher to $76.57 a barrel after the Biden administration imposed fresh sanctions targeting Russian energy revenue.

The Canadian 10-year bond yield rose 9.6 basis points to 3.445%, after earlier touching its highest level since Nov. 22 at 3.461%.

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