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Canadian dollar weakens 0.6% against the greenback
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For the week, the loonie was down 0.7%
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Greater Toronto Area home prices fall 1.2% in January
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Canadian bond yields rise across curve
(Adds economist quote and details throughout, updates prices)
By Fergal Smith
TORONTO, Feb 3 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Friday and ended its run of
weekly gains as U.S. data pointed to economic strength that
could make it harder for the Federal Reserve to bring inflation
under control.
The U.S. dollar rallied against a basket of major
currencies as the U.S. economy added many more jobs than
expected in January.
"Today's report does raise serious doubts about whether the
economy is slipping into recession," Sal Guatieri, a senior
economist at BMO Capital Markets, said in a note.
"If job growth remains strong and labour markets tighten
further, this will compromise the Fed's goal of restoring price
stability."
Optimism that inflation is easing and that central banks
will soon pause their tightening campaigns has helped boost risk
appetite since the beginning of the year.
The Bank of Canada has already signaled a pause after
raising its benchmark rate to a 15-year high of 4.50% last week.
The price of oil, one of Canada's major exports, extended
its recent decline on the prospect of higher interest rates and
as investors sought more clarity on the imminent EU embargo on
Russian refined products.
U.S. crude futures settled 3.3% lower at $73.39 a
barrel, while the Canadian dollar was trading 0.6% lower
at 1.34 per greenback, or 74.63 U.S. cents.
It has pulled back from its strongest level in 2-1/2 months,
which it touched on Thursday at 1.3260. For the week, it was
down 0.7%, following a streak of six straight weekly gains.
Domestic data showed that home prices in the Greater Toronto Area fell 1.2% in January from December and were down about 22% from their February peak. Canadian bond yields rose across the curve, tracking the move in U.S. Treasuries. The 10-year was up 9.4 basis points at 2.929%. (Reporting by Fergal Smith; editing by Jonathan Oatis and Alistair Bell)
