TORONTO, Dec 2 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Tuesday but the gain was limited as investors turned attention to domestic jobs data at the end of the week that could support expectations for the Bank of Canada to move to the sidelines.
The loonie was trading 0.1% higher at 1.3984 per U.S. dollar, or 71.51 U.S. cents, after moving in a range of 1.3976 to 1.4014.
Traders are "largely in wait-and-see mode ahead of Friday’s Canadian employment report and next week’s Bank of Canada meeting," said Tony Valente, senior FX dealer at AscendantFX. "Markets appear comfortable holding steady for now, as the BoC is unlikely to cut rates unless Friday’s jobs data comes in significantly weaker than expected."
Economists have forecast that Canada's economy shed 5,000 jobs in November and that the unemployment rate edged up to 7% from 6.9% in October. Still, that would follow two months of large job gains.
The Bank of Canada has signaled that its easing campaign is on hold after the benchmark interest rate was lowered to a three-year low of 2.25% in October. Investors expect no change in rates at a policy decision next week.
The price of oil , one of Canada's major exports, was trading 0.5% lower at $58.92 a barrel as traders weighed risks from Ukrainian drone strikes on Russian energy sites and concerns about oversupply.
Canadian bond yields edged lower across the curve. The 10-year was down half a basis point at 3.249%, after touching its highest level since September 5 at 3.277%.
Reporting by Fergal Smith Editing by Rod Nickel
