The Canadian dollar pulled back to end barely stronger against its US counterpart on Friday after touching its strongest in more than three weeks following surprisingly strong employment and trade data. The Canadian dollar settled at C$1.3232 to the greenback, or 75.57 US cents, slightly stronger than the Bank of Canada's official Thursday close of C$1.3242, or 75.52 US cents.

It had hit C$1.3177, its strongest level since December 14, in morning trade after Canada's economy unexpectedly added 53,700 jobs in December, all of them full-time positions, and also posted its first trade surplus since September 2014. "You really needed the positive combination to get us below C$1.32 and to stay there I think you're hard pressed to find a justification just given the economic backdrop out there," said Don Mikolich, executive director for foreign exchange sales at CIBC Capital Markets.

Canadian government bond prices were lower across a steeper yield curve, with the two-year price down 7.5 Canadian cents to yield 0.762 percent and the benchmark 10-year falling 57 Canadian cents to yield 1.729 percent. The Canada-US two-year bond spread was -45.8 basis points, while the 10-year spread was -70.5 basis points.

Copyright Reuters, 2017