The Canadian dollar fell 0.23 cents to 99.38 cents (U.S.) in a sharp turnaround Friday morning.
The loonie had been marching toward parity but reversed direction with a sharp decline when disappointing U.S. jobs figures were released.
The price of gold made solid gains, but other commodities lost ground.
The February gold contract gained $9.10 to $1,398.40 while the January crude contract lost 22 cents to US$87.78 a barrel on the New York Mercantile Exchange.
The March copper contract on the Nymex was unchanged at $3.97.
The U.S. unemployment rate climbed to 9.8 per cent in November, a seven-month high, as hiring slowed. Employers added only 39,000 jobs last month, a sharp decline from the 172,000 created in October.
The weakness was widespread. Retailers, factories, construction companies, financial firms and the government all cut jobs last month. The figures suggest continuing weakness in the U.S. economy, creating an unreceptive environment for Canadian exports and raw materials.
In Canada, the jobs report was slightly more optimistic, but the underlying story in the Statistics Canada report is one of overall weakness in Canada's labour force.
The country's unemployment rate fell three-tenths of a point to 7.6 per cent per cent in November, despite the economy creating only 15,200 new jobs – all part time.
Manufacturing jobs tumbled, down 28,600, after being roughly flat this year through to October.
“This month's dip will reignite concerns on CAD strength, particularly after the Q3 GDP report earlier this week showed a plunge in net exports,” said Mark Chandler, head of Canada fixed income and currency strategy at RBC Dominion Securities.
Meanwhile, Douglas Porter, deputy chief economist at BMO Nesbitt Burns said the mixed Canadian employment picture sends another message to the Bank of Canada that there is no urgency to raise interest rates when it makes its announcement Tuesday.
