USD/CAD climbs above 1.3900 as US Dollar bounces back, Canadian job data falters

Source Fxstreet
  • USD/CAD rises sharply above 1.3900 on multiple tailwinds.
  • The Canadian Dollar weakens as job demand remained slow in October.
  • The US Dollar rebounds strongly on Trump’s policy outlook.

The USD/CAD pair jumps above the key resistance of 1.3900 in Friday’s North American session. The Loonie asset strengthens as the Canadian labor addition data for October came in weaker than expected and the US Dollar (USD) bounces back strongly.

The Canadian employment report showed that the economy added 14.5K workers, lower than estimates of 25K and from 46.7K in September. The Unemployment Rate remained steady at 6.5%, which was expected to accelerate to 6.6%.

Slower job demand solidifies expectations that the Bank of Canada (BoC) could deliver another large interest rate cut in its last monetary policy meeting of this year in December. In the October meeting, the BoC reduced its key borrowing rates by 50 basis points (bps) to 3.75%.

Meanwhile, Average Hourly Wages accelerated to 4.9% compared to the similar month of the preceding year against 4.5% in September. Higher wage growth is less-likely to impact the BoC’s policy guidance with policymakers remaining confident about inflation staying within the tolerance.

The US Dollar Inde (DXY), which gauges Greenback’s value against six major currencies, extends its recovery to near 104.80. The outlook of the US Dollar remains firm as investors expect that Donald’ Trump’s protectionist policies would keep it competitive against other currencies. Trump vowed to hike import tariffs by 10% and lower corporate taxes in election campaigns.

Economic Indicator

Net Change in Employment

The Net Change in Employment released by Statistics Canada is a measure of the change in the number of people in employment in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending and indicates economic growth. Therefore, a high reading is seen as bullish for the Canadian Dollar (CAD), while a low reading is seen as bearish.

Read more.

Last release: Fri Nov 08, 2024 13:30

Frequency: Monthly

Actual: 14.5K

Consensus: 25K

Previous: 46.7K

Source: Statistics Canada

Canada’s labor market statistics tend to have a significant impact on the Canadian dollar, with the Employment Change figure carrying most of the weight. There is a significant correlation between the amount of people working and consumption, which impacts inflation and the Bank of Canada’s rate decisions, in turn moving the C$. Actual figures beating consensus tend to be CAD bullish, with currency markets usually reacting steadily and consistently in response to the publication.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
US September Nonfarm Payrolls Preview: Job Growth May Cool, How Will US Stocks, Dollar and Gold React?On Friday, October 2 (EDT), the U.S. will release its September nonfarm payrolls report, with markets focusing on whether job growth can sustain August's rebound and whether the data will
Author  TradingKey
14 hours ago
On Friday, October 2 (EDT), the U.S. will release its September nonfarm payrolls report, with markets focusing on whether job growth can sustain August's rebound and whether the data will
placeholder
Gold falls to near $4,150 as higher Treasury yields, oil prices outweigh softer PCE inflationGold price (XAU/USD) tumbles to near $4,150 during the early Asian session on Thursday, pressured by elevated US Treasury bond yields. Traders await the US September employment data for fresh impetus, which will be released later on Friday. 
Author  FXStreet
19 hours ago
Gold price (XAU/USD) tumbles to near $4,150 during the early Asian session on Thursday, pressured by elevated US Treasury bond yields. Traders await the US September employment data for fresh impetus, which will be released later on Friday. 
placeholder
Gold Price Forecast: US August PCE Imminent, Will Gold Prices Rise or Fall Short-Term?As of the European session on September 30, gold prices (XAUUSD) continued to recover after a sharp drop earlier this week, reclaiming $4,200 intraday, with the latest price trading near
Author  TradingKey
Sep 30, Wed
As of the European session on September 30, gold prices (XAUUSD) continued to recover after a sharp drop earlier this week, reclaiming $4,200 intraday, with the latest price trading near
placeholder
【Daily Brief】30-year Treasury tops 5.59%, S&P 500 slips to 7,670 and gold holds $4,180 — PCE lands tonightThe 30-year Treasury yield closed at 5.59%, its highest since June 2002, and the Dow fell 131.59 points to 51,349.92. US consumer confidence dropped to 81.9, a 12-year low, and JOLTS job openings fell to 7.1 million. August PCE and Q3 GDP both land at 8:30am ET tonight.
Author  Suzie
Sep 30, Wed
The 30-year Treasury yield closed at 5.59%, its highest since June 2002, and the Dow fell 131.59 points to 51,349.92. US consumer confidence dropped to 81.9, a 12-year low, and JOLTS job openings fell to 7.1 million. August PCE and Q3 GDP both land at 8:30am ET tonight.
placeholder
【Daily Brief】The dollar ground higher for six days — and the AUD fell 2% in the very week the RBA hiked to a 15-year highThe dollar index held above 101 while the Australian dollar slid to a two-month low of 0.6976, a 2.02% six-session loss, even though the RBA raised rates to 4.60% and Australian CPI printed 4.0%. The yen is the only major currency gaining, ahead of Japan's monthly intervention tally at 7pm JST.
Author  Irene Q.
Sep 30, Wed
The dollar index held above 101 while the Australian dollar slid to a two-month low of 0.6976, a 2.02% six-session loss, even though the RBA raised rates to 4.60% and Australian CPI printed 4.0%. The yen is the only major currency gaining, ahead of Japan's monthly intervention tally at 7pm JST.
goTop
quote