The loonie lost 0.64 of a cent to 79.85 cents US as Statistics Canada reported that more than 35,000 positions were created in January, far higher than the 4,500 that economists had expected. However, the agency said the gains were the result of more part-time work. The unemployment rate declined 0.1 percentage points to 6.6 per cent.
The loonie weakened as the greenback strengthened after the U.S. Labor Department reported total employment gains of 257,000 last month, well above the approximately 233,000 positions that economists had expected. The U.S. jobless rate edged up to 5.7 per cent from 5.6 per cent.
Traders also digested a warning from Canada Mortgage and Housing Corp. that the collapse in oil prices will send shock waves through housing markets in provinces with oil-producing economies. It says the 50 per cent plunge in crude prices since last summer will only be partly offset by the positive effect of the lower Canadian dollar and lower interest rates.
CMHC says that housing starts are expected to decline by one per cent in 2015 and that Multiple Listing Service sales will remain unchanged while the MLS average price is expected to increase by a modest 1.5 per cent.
The loonie has had a volatile week, losing and gaining as much as a full U.S. cent in individual trading sessions. The activity mirrored choppy action on commodity markets as traders tried to assess if crude prices had found a bottom last week around the US$44 a barrel mark.
They hope that a string of energy sector cutbacks that followed the collapse of crude oil prices have started to deal with a huge supply/demand imbalance. However, inventory data this week showed U.S. inventories at 80-year highs.
On Friday, the March crude contract in New York was up $1.21 to US$51.69 a barrel.
Gold prices fell heavily in the wake of the release of the U.S. jobs report, with the April bullion contract down $28.10 to US$1,234.60 an ounce. March copper slipped a penny to US$2.59 a pound.
In other economic news, Germany's industrial production was up in December by 0.1 per cent over November despite a drop in construction and capital goods, and the first time since early 2011 that industrial production in Europe's biggest economy has increased for four months in a row.
Greece also remains a key focus in financial markets as the new Greek government tries to forge a new deal on the country's debts with its partners in the 19-country eurozone. On Friday, it was confirmed that finance ministers from the eurozone are to hold a special meeting next Wednesday to discuss Greece's debts, a day ahead of a summit of European Union leaders.