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JACQUES BOISSINOT/The Canadian Press

The Canadian dollar closed lower Friday amid a much weaker-than-expected employment report for January and signs of further slowing in the housing market.The loonie was down 0.47 of a cent at 99.73 cents (U.S.) as Statistics Canada reported that the economy shed 21,900 jobs last month. Economists had looked for a gain of about 5,000.

The agency also revised downward the number of jobs created in December to 31,000 from 40,000.

The jobless rate decreased 0.1 of a point to 7 per cent, however, due to fewer people reported looking for work.

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Earlier, Canada Mortgage and Housing Corp. said housing starts plunged to 160,600 in January from a revised 197,100 reading in December.

Economists had looked for starts to come in at 195,000.

"The sheer scale of the drop points to an acute weakening in the home building sector, consistent with the slowing trend in residential building permits seen in recent reports," said CIBC World Markets senior economist Emanuella Enenajor.

"Much of the slowdown in January was due to weaker multiunit starts, with singles also down by a smaller margin."

Other data showed that Canada's trade deficit with the world fell more than expected in December.

Statistics Canada said the deficit came in at $901-million (Canadian), down from $1.7-billion in November. Merchandise imports fell 2.8 per cent in December while merchandise exports declined 0.9 per cent.

The loonie failed to find lift from strong Chinese economic data.

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Chinese exports rose 25 per cent in January from a year earlier, while imports into the world's second-biggest economy soared 28 per cent.

But a large part of the increase was due to companies rushing to fill orders before shutting down for up to two weeks for the Lunar New Year holidays that begin Sunday.

March copper on the Nymex added 4 cents to $3.76 (U.S.) a pound. China is the world's biggest consumer of the metal, viewed as an economic bellwether as it is used in so many applications.

But oil prices backed off from early advances and the March crude contract on the New York Mercantile Exchange slipped 11 cents to $95.72 (U.S.) a barrel.

April gold bullion faded $4.40 to $1,666.90 an ounce.

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