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)
By Fergal Smith
