Canadian dollar falls 0.3% against the greenback
Touches its weakest since December 5 at 1.3914
Canadian unemployment rate rises to 6.8%
Bond yields ease across the curve
Updates to afternoon trading
By Fergal Smith
TORONTO, Jan 9 (Reuters) - The Canadian dollar extended its weekly decline against the U.S. dollar on Friday as investors weighed domestic and U.S. employment data as well as recent events in Venezuela which resulted in a more uncertain outlook for Canada's oil exports.
The loonie CAD= was trading 0.3% lower at 1.3905 per U.S. dollar, or 71.92 U.S. cents, after touching its weakest intraday level since December 5 at 1.3914. For the week, the currency lost 1.3%, which was its biggest weekly decline since February last year.
"The geopolitical events in Venezuela have been weighing on the Canadian dollar most of this week as U.S. control of their energy sector will present longer-term structural risk for Canada’s heavy oil export markets," said George Davis, chief technical strategist at RBC Capital Markets.
A boost in Venezuelan oil exports could hurt Canadian companies that sell a similar heavy oil if Venezuelan crude diverts to the United States.
Canada created just 8,200 new jobs in December after three months of outsize gains and the unemployment rate rose to 6.8% from 6.5% as more people searched for work. Analysts had expected a loss of 5,000 positions and the jobless rate to edge up to 6.6%.
"Today’s Canadian employment report was more of a neutral factor for the currency as the stronger than expected job gains were partially offset by an increase in the unemployment rate," Davis said.
"However, with the U.S. employment report failing to show a more pronounced slowdown there, the odds of a Fed cut in January slumped, lending broader-based support to the USD."
The U.S. dollar .DXY added to recent gains against a basket of major currencies, while the price of oil CLc1, one of Canada's major exports, settled 2.35% higher at $59.12 a barrel on concerns about potential disruption to Iran's output and uncertainty about Venezuelan supply.
Canadian bond yields eased across the curve, with the 10-year CA10YT=RR down nearly one basis point at 3.393%.
(Reporting by Fergal Smith; Editing by Nia Williams, Rod Nickel)
((fergal.smith@thomsonreuters.com; +1 647 480 7446))