Loonie pares its recent gains ahead of Thursday's jobs report

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

TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Wednesday, with the loonie giving back some of its gains since March as more signs emerged of domestic economic damage from the coronavirus outbreak and ahead of jobs data on Thursday.

At 3:27 p.m. (1927 GMT), the Canadian dollar CAD= was trading 0.2% lower at 1.4027 to the greenback, or 71.29 U.S. cents. The currency traded in a range of 1.3988 to 1.4081.

“The weakness in the Canadian dollar is a bit of a puzzle, especially with its commodity cousins much higher,” said Adam Button, chief currency analyst at ForexLive. “At least part of it reflects the unusual outperformance of the Canadian dollar recently.”

Commodity-linked currencies such as the Australian dollar and the New Zealand dollar both gained, while the price of oil, one of Canada’s major exports, settled 6.2% higher at $25.09 a barrel on hopes that major producers would agree to cut output.

The loonie has rebounded 4.6% since hitting a four-year low on March 19. On Tuesday, it touched an 11-day high at 1.3941.

The value of Canadian building permits has likely fallen 23.2% year-over-year in March, Statistics Canada said in a preliminary flash estimate, while officials said a total of 4.26 million people had applied for all forms of emergency unemployment since March 15.

Canada’s employment report for March is due on Thursday.

Prime Minister Justin Trudeau said firms would only have to show that their year-on-year revenues had dropped by 15% in March, down from a 30% cap set earlier, to be eligible to claim a 75% wage subsidy for their employees.

Canadian government bond yields edged lower across much of the curve. The 5-year CA5YT=RR was down 1.8 basis points at 0.658%.

Reporting by Fergal Smith; Editing by David Gregorio and Peter Cooney