TORONTO - The Canadian dollar shook off early losses following the release of a strong U.S. employment report for February.
The loonie rose 0.16 of a cent to 101.06 cents US as the non-farm payrolls report said that the American economy cranked out 227,000 jobs, in line with expectations, while the jobless rate held steady at 8.3 per cent.
Revisions showed even higher job gains for the last two months.
The U.S. Labour Department said that 20,000 more jobs than originally reported were created in December while January job creation was revised upward by 41,000.
Positive news from Canada's biggest trading partner often strengthens the loonie as an improving U.S. economy means higher demand for commodities and Canadian manufactured goods.
The dollar had earlier moved as low as 100.73 cents US as a soft Canadian jobs report for February reflected a slower economy.
Statistics Canada said that the Canadian economy unexpectedly shed 2,800 jobs last month. Economists had expected the economy to create about 15,000 jobs during the month.
"The main message is that the domestic economy is now clearly struggling to post meaningful growth," said BMO Capital Markets deputy chief economist Doug Porter.
"The report has taken a bit of the recent shine off the loonie and will likely temporarily damp down talk of the Bank of Canada soon shifting to a tighter stance."
Statistics Canada also reported that the unemployment rate dipped to 7.4 per cent from 7.6 per cent.
The drop in the unemployment rate occurred not because the economy created jobs, but because the number of Canadians looking for employment fell by 37,900, all in Ontario.
The dollar also found support from higher prices for commodities.
The April crude contract on the New York Mercantile Exchange ran up $1.24 to US$107.82 a barrel.
Improving demand prospects pushed May copper up six cents to US$3.85 a pound following and American jobs data and news that China's inflation fell sharply in February, giving Beijing more leeway to stimulate the world's second-biggest economy. China is the world's biggest copper consumer.
Consumer price inflation fell to 3.2 per cent from January's 4.5 per cent.
Gold shed early losses and moved up $8.90 to US$1,707.60 an ounce.
Meanwhile, there was relief after Greece persuaded the vast majority of its private creditors to slash the value of their Greek bond holdings, which should pave the way for the country's second massive international bailout.
Greece's Finance Ministry said Friday that 85.8 per cent of private investors holding its Greek-law bonds had signed up to the deal and that it aimed to use legislation forcing those creditors still holding out to participate. After accounting for bonds that are governed by foreign laws, that proportion drops to 83.5 per cent.
The government said the deal will massively reduce the country's debt by C105 billion, or about 50 percentage points of gross domestic product.
If the swap had failed, Greece would have faced defaulting on its debts in two weeks when it faced a large bond redemption.
