TORONTO: The Canadian dollar strengthened against its US counterpart on Friday as stronger-than-expected domestic jobs data helped it make up some lost ground from earlier in the week when it was unable to benefit from a rally in crude oil prices. The loonie was 0.8% higher at 1.2635 to the greenback, or 79.15 US cents, after trading in a range of 1.2633 to 1.2731.

“It’s an overdue rally with the loonie not reacting at all this week to the oil rally that occurred,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets. “The employment data for Canada was better than the data for the US and that was another trigger for today’s move.”

The Canadian economy added 54,700 jobs in December, twice as many as expected, and the unemployment rate hit a 22-month low, though the survey was taken before the Omicron variant of the coronavirus began spreading. US data showed that employment increased less than expected in December amid worker shortages.

The Canadian dollar was little changed for the first week of the year after it was the only G10 currency to gain ground against the greenback in 2021, with an advance of 0.8%. It is expected to strengthen over the coming year as the global economic recovery from the COVID-19 crisis continues, but gains for the currency could be kept in check by Federal Reserve interest rate hikes, a Reuters poll showed.

US crude prices settled 0.7% lower at $78.90 a barrel on Friday but were up nearly 5% for the week as the market weighed supply concerns due to the unrest in Kazakhstan and outages in Libya. Canadian government bond yields were mixed across a steeper curve. The 10-year touched its highest level since Nov. 26 at 1.745% before dipping to 1.718%, up 2 basis points on the day.