C$ notches a six-week high on jobs gain, oil rally

Fri Dec 2, 2016 5:31pm EST
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By Fergal Smith

TORONTO (Reuters) - The Canadian dollar notched a six-week high against its U.S. counterpart on Friday as domestic jobs rose for the fourth straight month and oil climbed, sustaining strength since OPEC's decision midweek to cut crude output.

For the week, the loonie rose 1.8 percent, its biggest gain in eight months.

"Everything went well for the Canadian dollar this week," said Adam Button, currency analyst at ForexLive, including an agreement by the Organization of the Petroleum Exporting Countries to cut output, as well as stronger-than-expected gross domestic product and employment data.

The Canadian economy added 10,700 jobs in November, which bucked analysts' forecasts for a loss of 20,000 jobs after two months of growth and reinforced expectations that the Bank of Canada will keep interest rates unchanged next week and for all of 2017.

It is likely that the central bank will be more upbeat next week due to higher oil prices, stronger economic data and greater investor optimism about the economic outlook since Donald Trump won the U.S. presidential election, Button said.

"There has been no indication that he (Trump) wants to pick a (trade) fight with Canada ... instead he is going to make it easier for Canadian oil companies to get oil to the market."

Trump has said he would like to revive the Keystone XL oil pipeline project.

U.S. crude oil futures CLc1 settled up 62 cents at $51.68 a barrel, posting its biggest weekly gain since early 2011, with a rise of 12 percent.   Continued...

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015.  REUTERS/Mark Blinch