June 8, 2018 / 12:14 PM / 8 months ago

Canadian dollar slips ahead of domestic jobs data, G7 meeting

TORONTO (Reuters) - The Canadian dollar retreated against its broadly stronger U.S. counterpart on Friday, ahead of domestic jobs data and the G7 meeting and after a projected election win in Ontario for the Progressive Conservative Party.

FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. REUTERS/Mark Blinch/File Photo

Canada’s employment report for May, due at 8:30 a.m. EDT, can help guide expectations for another Bank of Canada interest rate hike as soon as next month.

Money markets see about a 70 percent chance of a rate increase in July by the central bank, which has raised the rate three times since last summer. BOCWATCH

The Group of Seven meeting of rich nations is almost certain to be marked by the clash of a combative U.S. President Donald Trump and other leaders on Friday when they pressure him to lift sanctions on steel and aluminum they fear could lead to a trade war.

Stocks and other risk-sensitive assets, including the commodity-linked Canadian dollar, lost ground ahead of the meeting.

At 7:53 a.m. EDT (1153 GMT), the Canadian dollar CAD=D4 was trading 0.2 percent lower at C$1.2994 to the greenback, or 76.96 U.S. cents. The currency traded in a range of C$1.2970 to C$1.3029.

The price of oil, one of Canada’s major exports, fell as weakening demand in China and surging U.S. output weighed on markets. U.S. crude CLc1 prices were down 0.6 percent at $65.59 a barrel.

The Conservatives, led by populist Doug Ford, are on track for a sweeping victory in Canada’s most populous province, Canadian networks projected on Thursday, as Ford declared the province is “open for business.”

Investors are searching for an economic blueprint for the right-leaning party, whose victory ends 15 years of Liberal rule.

The yield on Ontario’s 10-year bond was 1.1 basis point lower at 2.938 percent, while the gap between it and the yield on the equivalent maturity Quebec bond was little changed at about 5.5 basis points.

Canadian government bond prices were higher across the yield curve, with the two-year CA2YT=RR up 2 Canadian cents to yield 1.901 percent and the 10-year CA10YT=RR rising 10 Canadian cents to yield 2.273 percent.

Reporting by Fergal Smith; Editing by Steve Orlofsky

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