Canadian dollar rises for 6th straight week despite jobs decline

(Adds investor quotes and details throughout; updates prices)
* Canadian dollar touches a 3-1/2-year high at 1.2125
* For the week, the loonie gains 1.2%
* Canada sheds 207,100 jobs in April
* Canadian 5-year yield hits a two-month low at 0.841%

By Fergal Smith
TORONTO, May 7 (Reuters) - The Canadian dollar was little
changed against the greenback on Friday as jobs data for both
Canada and the United States fell short of estimates, with the
loonie holding near its strongest level in 3-1/2 years and
extending a weekly win streak.
Canada lost 207,100 jobs in April as fresh restrictions to
contain a variant-driven third wave of COVID-19 weighed on
employers, Statistics Canada data showed. Analysts had forecast
a decline of 175,000.
In the United States, data for the same month showed
employers hiring far fewer workers than expected, likely
frustrated by labor shortages.
"You have this unhealthy environment where growth goals are
struggling to be met but unfortunately inflation is picking up
everywhere," said Avi Hooper, a senior portfolio manager at
Invesco.
Supportive of the loonie, one cause of inflation has been a
surge in the prices of some of the commodities that Canada
produces.
Copper surged to a record peak on Friday, fueled by
speculators and industrial buyers as Western economies recover
from the pandemic, while oil settled 0.3% higher at $64.90 a
barrel.
"A higher oil price from current levels, we think, will be
the catalyst for the next leg of Canadian dollar strength,"
Hooper said.
The loonie was nearly unchanged at 1.2145 to the
greenback, or 82.34 U.S. cents, having touched its strongest
intraday level since September 2017 at 1.2125. For the week, it
was up 1.2%, its sixth straight weekly advance.
The currency has been on a tear since the Bank of Canada
last month signaled it could begin hiking interest rates in late
2022 and cut the pace of its bond purchases.
Canadian government bond yields fell across the curve. The
5-year touched its lowest since March 5 at 0.841%
before bouncing to 0.878%, down 3.8 basis points on the day.

(Reporting by Fergal Smith; editing by Jonathan Oatis)


First Published: 2021-05-07 15:57:39
Updated 2021-05-07 21:39:39


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