Canadian dollar posts 1-week high as jobs plunge less than feared

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TORONTO — The Canadian dollar strengthened

to a one-week high against its U.S. counterpart on Friday as

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Canadian dollar posts 1-week high as jobs plunge less than feared Back to video

signs emerged of easing frictions between the United States and

China and domestic data showed a plunge in jobs that was about

half the number expected.

Canada lost a record-breaking 2.0 million jobs in April,

when non-essential business was halted across the country to

help contain the coronavirus pandemic, while the unemployment

rate surged to 13.0%, official data showed. Analysts had

forecast a loss of 4 million jobs and an unemployment rate of

18%.

“Not as bad a feared, but still a terrible report as the

contraction in the job market accelerated in April amid a full

month of lockdowns,” said Ryan Brecht, a senior economist at

Action Economics.

The U.S. economy, where Canada sends about 75% of its

exports, also lost fewer jobs in April than feared.

Top U.S. and Chinese trade representatives discussed their

Phase 1 trade deal, with China saying they agreed to improve the

atmosphere for its implementation and the United States saying

both sides expected obligations to be met.

Canada runs a current account deficit and is a major

producer of commodities, including oil, so the currency tends to

be sensitive to the global flow of trade and capital.

U.S. crude prices were up 3.2% at $24.31 a barrel and

were on track for a second consecutive week of gains as more

countries moved ahead with plans to relax economic and social

lockdowns put in place to halt the coronavirus pandemic and as

more output was shut in.

The Canadian dollar was trading 0.1% higher at

1.3950 to the greenback, or 71.68 U.S. cents. The currency,

which was on track to rise 0.7% for the week, touched its

strongest intraday level since May 1 at 1.3922.

Separate data, from the Canadian Mortgage and Housing

Corporation (CMHC), showed that Canadian housing starts,

excluding the province of Quebec, rose 10.8% in April compared

with the previous month.

Canadian government bond yields rose across a steeper curve,

with the 10-year yield up 2.8 basis points at

0.577%.

(Reporting by Fergal Smith; Editing by David Gregorio)