EBC Markets Briefing | ​Loonie underpinned by oil price rally

The Canadian dollar was holding on to a second straight weekly gain on Thursday, after stronger-than-expected domestic jobs data and a jump in oil prices bolstered optimism about economic outlook.

The country added 8,800 jobs last month, compared to an expected decline of 12,500. However, the unemployment rate climbed to 7%, its highest level in almost 9 years.

Markets now see a 73% chance the BOC stands pat in July, up from 67% before the data. The central bank refrained from cutting rates for a second straight meeting last week, citing the need to study the effects of US trade policy.

The US and Canada have intensified talks for an economic and security deal in recent weeks and substantial progress has been made, sources tell CTV News. That came after Carney's repeatedly denunciation of Washington.

WTI crude continued to push ahead despite OPEC+'s output increase. Morgan Stanley noted the 411,000 bpd the cartel pledged to add in May have not materialized in the global figures.

Crude inventories fell by 3.6 million barrels in the week ended 6 June, the EIA said, compared with analysts' expectations for a 2 million-barrel draw. Meanwhile, refinery crude runs increased.

Loonie is digesting its gains, and a retest of 1.3634 per dollar cannot be ruled out. But MACD suggests a retreat from the current level could be around the corner.

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