Canadian dollar nears largest weekly decline in 11 months as jobless rate rises

The Canadian dollar was about 0.2% lower at 1.3895 per U.S. dollar and was set for a 1.2% weekly drop, its biggest since February; Canada added 8,200 jobs in December while the unemployment rate rose to 6.8%.

The Canadian dollar weakened against the U.S. dollar this week and was headed for its largest weekly decline since February. Investors cited a mix of domestic jobs data, stronger-than-expected U.S. employment, and recent developments in Venezuela that introduced uncertainty around Canada’s heavy oil exports. An RBC Capital Markets strategist said Venezuelan developments and U.S. payrolls have weighed on the loonie and on expectations for U.S. rate cuts. Key developments: - The loonie traded around 1.3895 per U.S. dollar, down about 0.2% on Friday, and was set for a weekly decline of about 1.2%. - Canada reported 8,200 new jobs in December and an unemployment rate that rose to 6.8% from 6.5%. - Analysts and strategists noted that potential increases in Venezuelan crude exports could compete with Canada’s heavy oil in U.S. markets, adding uncertainty to export prospects. - Oil prices rose about 2.7% to $59.31 a barrel on concerns about possible supply disruptions, and Canada’s 10-year government yield eased modestly. Summary: The currency’s decline reflects a combination of softer domestic labour-market signals and renewed oil-market uncertainty, alongside stronger U.S. employment that reduced expectations for a near-term Fed cut. Undetermined at this time.