- The US economy created 263,000 jobs in November, compared to 200,000 for the market consensus.
- Canadian Job Markets add 50,700 full-time jobs in November.
- The Loonie falls against the US dollar but strengthens against other rivals.
The USD/CAD it spiked after the release of the Canadian and US jobs reports and peaked at 1.3520, the highest level in two days. It then fell back to the 1.3450 zone. It is still positive on the day, but has not reached the highs.
The loonie wins with the data…
Despite the USD/CAD rally, the loonie rose against most of its rivals boosted by labor market data. The net change in employment in Canada for November was positive at 10,100, against expectations of 5,000. Full-time jobs increased by more than 50,000. Wages increased 5.6% year-on-year.
“Some early signs that broader inflationary pressures have started to ease, and signs that domestic demand is softening, mean that the BoC may be nearing the end of the current rate hike cycle. But we expect another 25 basis point hike in the overnight rate in next week’s central bank policy decision,” analysts at RBC Capital Mercados explained.
But the dollar earns more with data
In November, the US economy added 263,000 jobs above the market consensus of 200,000. The Labor Department announced that the unemployment rate stood at 3.7%. Average Hourly Earnings pushed up inflation, rising 5.1% year-on-year.
The dollar soared across the board as stock prices fell and US Treasury yields rose. The figures keep the door open to more interest rate hikes. The labor market remains too hot for the Fed’s liking, and it will take much slower growth in employment and wages to bring inflation back to the central bank’s 2% target on a sustained basis. Wells Fargo analysts.
USD/CAD rises, but does not reach the highs
The pair is around 1.3470, up on the day, but far from daily highs. The same situation occurs on the daily chart. On Tuesday, the pair reached a high of 1.3646, but then pulled back 250 points, finding support at the 1.3400 area.
The 4 hour chart continues to show a bullish bias supported by the 1.3400 area, a horizontal level and also where an uptrend line is located. A break down should strengthen the Loonie.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.