Canadian dollar pares losses on US jobs data

The Canadian dollar weakened slightly against its US counterpart on Friday but clawed back some losses after US jobs data showed tepid wage growth, while the loonie ended higher for the second straight week. US job growth surged more than expected in January, but a smaller-than-expected increase in wages reduced pressure on the Federal Reserve to raise rates in the near term.
"All the details were disappointing, so when the market figured that out then we came lower (for the US dollar)," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets. "The market came to the realization it takes the March rate hike off the table." US crude prices settled 29 cents higher at $53.83 a barrel after the United States imposed sanctions on some Iranian individuals and entities.
Oil is one of Canada's major exports. The Canadian dollar ended at C$1.3028 to the greenback, or 76.76 US cents, slightly weaker than Thursday's close of C$1.3020, or 76.80 US cents.
The currency traded in a range of C$1.2993 to C$1.3083. For the week, the loonie gained 0.8 percent, helped by domestic data that showed the economy expanded faster than expected in November and the manufacturing sector grew at its fastest pace in over two years in January, while it has been absent from a list of currencies attracting the ire of US President Donald Trump.
It was the second straight week that the Canadian dollar had ended higher and the fifth in the last six weeks. On Tuesday, it touched its strongest in more than four months at C$1.2969, Speculators increased bullish bets on the Canadian dollar, data from the Commodity Futures Trading Commission and Reuters calculations showed. Canadian dollar net long positions rose to 3,472 contracts as of Jan. 31 from 2,519 a week earlier.
But BMO's Anderson sees value in selling the Canadian dollar near its current level, mindful that a shift in US corporate tax policy this year could boost the greenback.
Canadian government bond prices were mixed across the yield curve, with the two-year flat to yield 0.775 percent and the 10-year falling 2 Canadian cents to yield 1.767 percent.
The Canadian economy created slightly more jobs than previously thought in 2016, with much of the growth coming from part-time employment. Canada's budget watchdog forecast that the government will have a smaller-than-expected deficit in the current fiscal year.