USD/CAD Sinks to New Lows on Labor Market Reports

The US dollar today weakened against its Canadian counterpart after the release of upbeat Canadian employment data by Statistics Canada. The release of disappointing US non-farm payrolls report also contributed to the USD/CAD currency pair’s decline.

The USD/CAD currency pair today declined by over 120 points from its daily highs after the release of the NFP data.

The release of Canada’s labour force survey for October by Statistics Canada early in the American session triggered the massive decline in the pair. Canada added 35,300 new jobs in October as opposed to the market consensus of 15,000 new jobs. However, the country’s unemployment rate was much higher than expected as it came in at 6.3% versus the consensus estimate of 6.2%. The commodity-linked loonie’s rally was further accelerated by the rising oil prices as tracked by the West Texas Intermediate, which hit highs above $55, and was on track to close higher for the fourth consecutive week.

The release of the US non-farm payroll report by the Bureau of Labor Statistics contributed to the greenback’s overall weakness as it was lower than expected. The NFP came in at 261,000, which was lower than the consensus estimate of 313,000. However, the unemployment rate beat expectations by coming in at 4.1% versus the expected 4.2%, which slightly boosted the US dollar.

The currency pair’s future performance is likely to be affected by the release of US ISM Non-manufacturing/Services PMI and factory orders as well as global oil prices.

The USD/CAD currency pair was trading at 1.2736 as at 13:43 GMT having dropped from a daily high of 1.2835. The CAD/JPY currency pair was trading at 89.52 having rallied from a low of 88.69 earlier today.

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