TORONTO, Nov 5 (Reuters) - The Canadian dollar weakened against its US counterpart on Thursday, but the move was limited as investors awaited domestic jobs data and looked for clues on the direction of US policy after the midterm elections.
The loonie was trading 0.1% lower at 1.3985 per US dollar, or 71.51 US cents, extending its pullback from a seven-week high on Wednesday at 1.3927.
A wave of anger over US President Donald Trump's policies, particularly the US-Iran war's role in pushing the cost of living higher, helped Democrats take control of both chambers of Congress.
"There are two paths Trump can go down - he can double down on unpopular trade wars or he can listen to the electorate and change course," said Adam Button, chief currency analyst at investingLive.
"At some point we get back to focusing on the economy and inflation," Button said.
On Wednesday, Dominic LeBlanc, Canada's minister in charge of US trade ties, said the US midterm results would not change Ottawa's stance toward trade talks with the US, adding he would speak soon with his American counterparts.
Canada's employment report for October, due on Friday, is expected to show the economy adding 13,600 jobs and the unemployment rate holding steady at 6.5%.
US crude oil futures were trading 2.7% higher at $90.47 a barrel, clawing back some of the previous day's sharp decline. Oil is one of Canada's major exports.
Canadian bond yields eased across the curve, tracking moves in US Treasuries. The 10-year yield was down 2.8 basis points at 3.672%, after earlier touching its lowest level since August 27 at 3.660%.
Economists are urging Canadian Prime Minister Mark Carney's government to restrain spending in its second budget later on Thursday, saying that despite windfall oil revenue, spending commitments could lead to bigger deficits in the coming years.
Reporting by Fergal Smith; Editing by Chris Reese
