Canadian dollar strengthens on jobs data; gains restrained as oil falls

Fri Jun 10, 2016 9:45am EDT
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By Fergal Smith

TORONTO (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Friday after stronger-than-expected domestic jobs data, although gains for the risk-sensitive commodity-linked currency were restrained as oil prices and stocks fell.

Canada's economy added a higher-than-expected 13,800 jobs in May as full-time employment gains more than offset part-time losses, Statistics Canada data showed.

However, some of the gains were associated with the 2016 Census and private sector jobs fell.

"Given the public sector skew to the numbers I think the markets and the Bank of Canada will see through the surprising strength in the headline number," said Sal Guatieri, senior economist at BMO Capital Markets.

Oil prices fell as a stronger U.S. dollar pulled crude off the 2016 highs hit this week, although strong refinery demand and global supply disruptions lent support. U.S. crude CLc1 prices were down 1.92 percent to $49.59 a barrel.

At 9:26 a.m. EDT (1326 GMT), the Canadian dollar CAD=D4 was trading at C$1.2689 to the greenback, or 78.81 U.S. cents, stronger than Thursday's close of C$1.2713, or 78.66 U.S. cents.

The currency's strongest level of the session was C$1.2660, while its weakest was C$1.2759. On Wednesday, the loonie touched a five-week high at C$1.2655.

Safe-haven assets, such as core sovereign debt, advanced as global issues, including uncertainty over U.S. interest rate hikes and the impending vote on Britain's membership in the European Union, kept investors cautious.   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