The USDCAD currency pair was trading down over 100 pips from its daily highs after reversing course during the American session following the release of upbeat Canadian jobs data, which surpassed the US nonfarm payroll data released concurrently.
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Canada added 104,000 jobs beating analysts’ expectations of 5,500 jobs, overshadowing the upbeat US nonfarm payroll data, which showed that the country added 223,000 jobs, slightly higher than consensus estimates of 200,000 jobs.
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The unemployment rate in both countries fell slightly, with Canada’s figures falling to 5.0% from 5.1% and the US dropping to 3.5% from 3.6%. Average hourly earnings in the United States fell to 0.3% from the previous figure of 0.4%.
On the other hand, average hourly earnings in Canada grew by over 5% for the seventh consecutive month underlining the strength of the Canadian economy as December 2022 earnings grew 5.1% compared to December 2021.
Therefore, the Canadian dollar’s rally against its US counterpart was driven by the relative strength of the Canadian labour market compared to the US job market. However, the US NFP data was not well received by the markets.
The US Dollar Index struggled to rally higher as the dollar traded flat against its primary peers, such as the euro and the British pound. Most currencies traded flat against the dollar, including the Australian and New Zealand dollars.
The USDCAD currency pair did not benefit much from global crude oil prices that were trading sideways today, given that Canada is a leading crude oil producer and exporter. Most FX pairs are looking to end the week trading flat, and it will be interesting to see how they perform next week.
*This is not investment advice.
The USDCAD price chart.
The USDCAD currency pair was trading down over 100 pips (0.10%) from its daily high as the Canadian dollar rallied.
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