February 6, 2020 / 3:56 PM / 2 months ago

Canadian dollar nears two-month low ahead of key jobs report

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

TORONTO (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Thursday, approaching a two-month low it hit the previous day as investors awaited domestic jobs data that could help guide Bank of Canada interest rate expectations.

Canada’s employment report for January is due on Friday. In 2019, employment increased by 1.7% but all of the job gains were in the first three quarters of the year.

Last month, the Bank of Canada opened the door to an interest rate cut should recent weakness in the domestic economy persist.

At 9:40 a.m. (1440 GMT), the Canadian dollar CAD=D4 was trading 0.1% lower at 1.3294 to the greenback, or 75.22 U.S. cents. The currency, which on Wednesday hit a two-month low at 1.3304, traded in a range of 1.3271 to 1.3296.

The loonie will climb over the coming year, recouping much of its recent decline, as the economic threat from the coronavirus outbreak in China likely fades, and some analysts do not expect the Bank of Canada to cut interest rates in 2020, a Reuters poll of analysts showed.

The price of oil, one of Canada’s major exports, gave up early gains on Thursday despite potential action from the OPEC+ group of producers to counter an expected fall in oil demand as a consequence of the coronavirus outbreak. U.S. crude oil futures CLc1 were down 0.9% at $50.32 a barrel.

Stocks .WORLD rose globally as China’s plan to chop additional tariffs on some American goods by 50% helped ease fears over the financial fallout of the coronavirus epidemic.

Canadian government bond yields were mixed across the yield curve. The 10-year yield was nearly unchanged at 1.387%, after earlier in the day touching its highest level since Jan. 24 at 1.403%.

Reporting by Fergal Smith; editing by Jonathan Oatis

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