Canadian dollar notches biggest weekly gain of the year
Canadian dollar notches weekly gain of 1%
Canada's economy sheds 2,800 jobs in July
Price of U.S. oil increases 0.9%
10-year yield eases 5.6 basis points
By Fergal Smith
TORONTO, Aug 9 (Reuters) -The Canadian dollar steadied against its U.S. counterpart on Friday and notched its biggest weekly advance in eight months, as domestic jobs data did little to alter expectations for Bank of Canada interest rate cuts.
The heavily shorted currency CAD= was trading nearly unchanged at 1.3730 per U.S. dollar, or 72.83 U.S. cents. For the week, it was up 1%, its first weekly advance in four weeks and its biggest since December.
"I think this is mostly a short-covering bounce we're getting in the Canadian dollar than people all of a sudden falling back in love with the loonie," said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC.
Speculators have raised their bearish bets on the Canadian dollar to an all-time high, recent data from the U.S. Commodity Futures Trading Commission showed. 1090741NNET
The currency touched a near two-year low of 1.3946 on Monday when financial markets turned volatile.
Canada's economy shed 2,800 jobs in July, while the unemployment rate remained at a 30-month high of 6.4%. Analysts had forecast a gain of 22,500 jobs and the unemployment rate to rise to 6.5%.
"I think that today's employment data really hasn't changed anybody's mind for Canada," Chandler said. "The market is 100% confident of another 25 basis point cut (in September)."
The BoC has cut its benchmark interest rate twice since June, moving in 25 basis point increments and lowering the rate to 4.50%.
Investors expect another quarter-point cut at the next policy decision on Sept. 4 and two further moves by the end of the year. 0#BOCWATCH
The price of oil CLc1, one of Canada's major exports, rose 0.9% to $76.85 a barrel as positive economic data eased demand concerns.
The Canadian 10-year CA10YT=RR yield eased 5.6 basis points to 3.120%, roughly matching the move in the equivalent U.S. rate.
Reporting by Fergal Smith, Editing by Nick Zieminski
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