Canadian dollar weaker as oil slips; trade, jobs data eyed

TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Monday as oil prices fell and bond yields settled at a two-week low, with investors awaiting December trade data due on Tuesday and jobs numbers later in the week for signs of economic growth.

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

The loonie, as Canada’s currency is popularly known, had gained for two straight weeks on a combination of favorable economic data and greenback weakness. Last week, it touched its strongest level since September.

The Canadian dollar CAD=D4 settled at C$1.3087 to the greenback, or 76.41 U.S. cents, weaker than the Bank of Canada's official close on Friday of C$1.3028, or 76.76 U.S. cents.

The loonie traded in a range of C$1.3008 to C$1.3135.

“We spent two or three days trying to push through C$1.30 without any real success,” said Darcy Browne, managing director for foreign exchange sales at CIBC Capital Markets.

“It rallied up to C$1.3135, which is the 200-day moving average, and got rejected pretty hard from there as well,” he said.

Economists polled by Reuters have a wide range of expectations for Tuesday’s data after Canada achieved its first trade surplus in more than two years in November.

The most optimistic see a C$1.5 billion surplus, while the most pessimistic expect a C$1.5 billion deficit. The median view is for a surplus of C$350 million after the surprise C$526 million surplus in the prior month.

Jobs data is due on Friday, with the market expecting no growth after a bumper 53,700 job gains in December.

U.S. crude oil CLc1 prices settled down 1.5 percent at $53.01 a barrel, while Brent LCOc1 lost 1.9 percent to $55.72.[O/R]

Canadian government bond prices were higher across the maturity curve, with the two-year CA2YT=RR price up 7.5 Canadian cents to yield 0.737 percent and the benchmark 10-year CA10YT=RR rising 52 Canadian cents to yield 1.701 percent, its lowest settlement since Jan. 23.

The Canada-U.S. two-year bond spread narrowed to -41.6 basis points, while the 10-year spread came in at -70.9 basis points.

Reporting by Alastair Sharp; Editing by Lisa Von Ahn and Peter Cooney