The Canadian dollar strengthened against its U.S. counterpart on Friday as stock markets steadied globally and domestic data showed the economy adding jobs in June, with the loonie clawing back some of this week’s decline.
Canada added 231,000 jobs in June, more than expected, bringing employment within 1.8 per cent of pre-pandemic levels, as public health restrictions were eased in several regions of the country, Statistics Canada data showed. It follows losses in the two previous months.
World stock markets rose after a steep decline the day before, which was driven by worries that the growing spread of the Delta coronavirus variant could slow economic recovery.
Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to the outlook for the global economy.
Oil prices rose for a second day as data showed a draw in U.S. inventories but were heading for a weekly loss amid uncertainty over global supplies after an OPEC+ impasse.
U.S. crude gained 1.4 per cent to $73.99 a barrel, while the Canadian dollar was trading 0.4 per cent higher at 1.2488 to the greenback, or 80.08 U.S. cents.
On Thursday, the currency hit its weakest level in 2-1/2 months at 1.2590. For the week, it was on track to decline 1.4 per cent.
The Bank of Canada will taper its asset purchases again at its July 14 meeting, encouraged by robust growth prospects, according to a Reuters poll of economists who also said a spread of new COVID-19 variants was the top economic risk this year.
Canadian government bond yields were higher across much of a steeper curve, tracking the move in U.S. Treasuries. The 10-year rose 4.1 basis points to 1.306 per cent, after touching on Thursday its lowest level in over four months at 1.239 per cent.
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