The commodity-linked Canadian dollar rose to a three-week high against its US counterpart on Friday, supported by rising oil prices and weaker-than-expected US employment data.

The Canadian dollar, known as the “loonie,” was trading 0.5% higher at C$1.3610 per US dollar, or about 73.48 US cents, after touching C$1.3598 during the session, its strongest level since February 13.

On a weekly basis, the Canadian currency gained about 0.2%, as the surge in oil prices helped offset demand for the US dollar as a safe haven.

The Canadian dollar also posted stronger weekly gains against other G10 currencies, particularly those of oil-importing countries. Against the euro, it rose 2.1%, marking its largest weekly gain since February last year.

Oil prices jumped about 11% to reach $89.94 per barrel on Friday, as the ongoing conflict disrupted shipping and energy exports through the vital Strait of Hormuz.

Oil is one of Canada’s key exports, meaning higher prices could support the Canadian economy as well as government tax revenues.

Amo Sahota, director at Klarity FX in San Francisco, said that the widening conflict with Iran and the possibility that it could last longer are supportive for Canadian bonds. He added that markets are also seeing a rapid shift in US interest rate expectations as traders reassess the risk of higher inflation in the United States alongside a disappointing jobs report.

Data showed the US economy unexpectedly lost jobs in February, while the unemployment rate rose to 4.4%, potentially signaling deteriorating labor market conditions and placing the Federal Reserve in a difficult position amid rising oil prices.

The US dollar index, which measures the currency against a basket of major peers, declined, while US Treasury yields edged slightly lower.

In contrast, Canadian economic data came in stronger. The seasonally adjusted Ivey Purchasing Managers Index rose to 56.6 last month from 50.9 in January, marking its highest level since September.

Meanwhile, the yield on Canada’s 10-year government bond rose by 2.5 basis points to 3.384%, while the spread between Canadian and US 10-year yields narrowed by 5 basis points to 73.7 basis points in favor of US Treasuries.

US stock indices fell sharply during trading on Friday following comments from President Donald Trump as well as the release of the monthly employment report, which showed an unexpected decline in job numbers.

Data released by the US Department of Labor showed that the world’s largest economy lost 92,000 jobs in February, while analysts had expected the addition of 58,000 jobs during the same period.

The data also revealed that the US unemployment rate rose to 4.4% last month from 4.3% in January, compared with expectations that the rate would remain unchanged.

Meanwhile, US President Donald Trump said in a post on the Truth Social platform that no agreement would be reached to end the war between the United States and Iran without Tehran’s “unconditional surrender.”

Qatar’s energy minister also warned in an interview with the Financial Times that Gulf energy producers may be forced in the coming days to declare force majeure, which would mean halting production and could push oil prices to $150 per barrel.

He added that the widening conflict in the Middle East could “bring down the world’s economies,” noting that if the war continues for weeks it could affect global GDP growth as energy prices rise, certain products become scarce, and industrial supply chains are disrupted.

In trading, the Dow Jones Industrial Average fell by 1.2% (614 points) to 47,340 as of 16:57 GMT. The broader S&P 500 declined 1.2% (85 points) to 6,746, while the Nasdaq Composite dropped 1.1% (254 points) to 22,495.

Bitcoin rose 6% over the past seven days and touched the $74,000 level during the week, supported by strong inflows from US investors through exchange-traded funds linked to the cryptocurrency.

According to data from SoSoValue, Bitcoin ETFs recorded total inflows of $917 million during the first four days of the week. Although about $227 million was withdrawn in a single day, market sentiment appeared to turn positive after the cryptocurrency managed to break out of the consolidation range it had been trading within for some time.

Declining social sentiment

Data from Santiment indicates that social media engagement related to Bitcoin has reached similarly low levels only twice before.

This reflects several signals about the current market environment, most notably:

The market entering a phase of capitulation or forced selling.

This is not the first time strong pessimism has dominated sentiment toward the cryptocurrency.

A decline in social sentiment often signals that the market may be approaching a local bottom.

Despite the recent rebound, prices still need to rise further before sentiment improves meaningfully. Holding above the $70,000 level is currently critical, as a break below this level could threaten the bullish move and push prices back toward $62,000.

Buy signal on the daily chart

The daily chart shows a buy signal that appeared two days ago, coinciding with the breakout from the consolidation range. The signal is based on a system that tracks candlestick patterns characterized by above-average trading volume, a clear market direction, and a specific candlestick formation.

Since the signal appeared at an important technical level, it increases the likelihood that the breakout is genuine. Institutional investors and large holders known as “whales” also appear to have supported the move, especially as global geopolitical tensions continue to rise.

Analysts expect the price may temporarily pull back toward $70,000 to find sufficient liquidity before resuming its upward trend. If this level successfully flips from former resistance into support, it could confirm a recovery phase that may push the price toward $85,000 in the near term.

Key levels to maintain the bullish trend

On the hourly chart, the $69,300 level appears as a potential entry point, as it previously acted as a major supply zone and could now turn into support. There is also a fair value gap at this level, increasing the probability that price may move toward it to fill pending buy orders.

With technical indicators approaching oversold territory on the short-term timeframe, the likelihood of a strong rebound increases. If that occurs, the price could target $73,500 in the near term, offering a potential risk-to-reward ratio of around 3.5.

Bitcoin must remain above the $69,000 level to preserve the current bullish momentum.

Oil prices are heading for their strongest weekly gains on Friday since the extreme volatility seen during the COVID-19 pandemic in the spring of 2020, as the ongoing conflict in the Middle East continues to disrupt shipping and energy exports through the vital Strait of Hormuz.

Brent crude futures have surged about 22% this week, marking the largest increase since May 2020, when the record production cut agreement by the OPEC+ alliance helped prices recover from pandemic-era lows. US West Texas Intermediate crude has also risen around 27%, its biggest weekly gain since April 2020.

During Friday’s trading, Brent extended its advance, rising $2.95, or 3.45%, to $88.36 per barrel, while US crude climbed $3.94, or 4.86%, to $84.95. Both benchmarks traded at their highest levels since 2024.

Can oil reach $150 per barrel?

Qatar’s energy minister said in an interview with the Financial Times that all Gulf energy-producing countries may be forced to halt their exports within weeks, a development that could push oil prices toward $150 per barrel.

The sharp rise in oil prices began after the United States and Israel launched strikes on Iran on Saturday, prompting Tehran to halt oil tanker traffic through the Strait of Hormuz, a route through which roughly one-fifth of the world’s daily oil supply passes.

Since then, the conflict has spread to major energy-producing areas across the Middle East, disrupting production and shutting down several refineries and liquefied natural gas facilities.

Giovanni Staunovo, commodities analyst at UBS, said: “Every day the Strait of Hormuz remains closed will push prices higher.” He added that markets had previously believed Donald Trump might eventually step back because he does not want high oil prices, but the longer the crisis lasts, the clearer the risks become.

US President Donald Trump said in an interview that he is not concerned about rising gasoline prices in the United States as a result of the conflict, stressing that the US military operation remains the priority even if prices increase.

A White House official said the US Treasury Department is expected to announce measures to address rising energy prices caused by the conflict, which briefly pushed prices down by more than 1% earlier in Friday’s session before losses were later reduced.

Bloomberg also reported that the Trump administration has, for now, ruled out using the Treasury Department to intervene in oil futures markets.

In a move aimed at easing supply constraints, the Treasury Department on Thursday granted exemptions allowing companies to purchase sanctioned Russian oil stored aboard tankers, prompting some Asian refineries to increase their purchases.

Indian refineries received the first of these exemptions, buying millions of barrels of Russian crude, reflecting a shift after months of pressure to halt such purchases.

Ship-tracking firm Kpler estimates that around 30 million barrels of Russian oil are currently available and loaded on tankers across the Indian Ocean, the Arabian Sea, and the Singapore Strait, including volumes held in floating storage.

Despite the latest rally, analysts note that the current price surge remains less severe than previous shocks, such as in 2022 when Russia’s invasion of Ukraine pushed oil prices above $100 per barrel.

Tony Sycamore, market analyst at IG, said: “It’s important to put this move in perspective. Although oil has risen about 20% this month, the current price is still only around $3.40 above its average over the past four years.”