By DAVID GEORGE-COSH The Canadian dollar weakened against its U.S. counterpart early Friday, after a key domestic labor report showed strong job losses in January. The U.S. dollar was at C$1.0026 early Friday, from C$1.0006 right before the data and C$0.9978 late Thursday, according to data provider CQG. Canada's economy shed 21,900 jobs in January, but the jobless rate moved slightly lower to 7.0% from 7.1% from the prior month, according to data released Friday. Expectations were for Canada to add 5,000 jobs in the month, according to a report from Royal Bank of Canada. Canadian employment has increased by 183,900 over the past five months, an average of 36,800 new jobs per month, a pace that wasn't completely sustainable, said Benjamin Reitzes, senior economist at BMO Capital Markets. Separately, Canada's trade deficit with the world decreased from 901 million Canadian dollars ($898.4 million) in December from C$1.7 billion in the prior month, according to Statistics Canada. The market had expected the trade deficit to decrease to C$1.45 billion in December. The Canadian dollar headed into the monthly labor release notably weaker against the greenback after a print of domestic housing starts plunged to 160,600 in January, down from a revised 197,100 reading in the prior month. The release, which widely missed expectations of a 195,000 starts, suggests Canadian homebuilding should be a drag on the Canadian economy this year, said Emanuella Enenajor, and economist at CIBC World Markets.

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