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Loonie shakes off record-breaking jobs loss as oil rallies

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 strengthened against its U.S. counterpart on Thursday along with gains for stocks and higher oil prices, with the currency fluctuating after domestic data showed a record level of job losses.

At 9:36 a.m. (1336 GMT), the Canadian dollar CAD= was trading 0.3% higher at 1.3968 to the greenback, or 71.59 U.S. cents. The currency, which on Tuesday touched an 11-day high at 1.3941, traded in a range of 1.3955 to 1.4076.

Canada shed one million jobs in March while the unemployment rate soared to 7.8%, official data showed, as the coronavirus outbreak forced the closure of non-essential businesses.

Ottawa is rolling out more than C$200 billion in measures to support the economy, while the Bank of Canada has slashed interest rates to 0.25% and has begun quantitative easing, a program of buying government bonds in large-scale.

The U.S. Federal Reserve has also been active. On Thursday, it announced a massive $2.3 trillion program to bolster local governments and businesses impacted by the coronavirus pandemic, which boosted U.S. equity markets .SPX.

Canada runs a current account deficit and is a major producer of commodities, including oil, so the loonie tends to be sensitive to the global flow of trade and capital.

U.S. crude CLc1 prices were up 4.7% at $26.26 a barrel on expectations the world's leading crude producers will at a meeting later in the day overcome obstacles that have so far prevented a deal to cut output.

Canadian government bond yields were lower across much of the curve, with the 10-year CA10YT=RR down 1.8 basis points at 0.795%.

Reporting by Fergal Smith

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