The USDCAD currency pair was trading down over 55 pips as the Canadian dollar rallied against the US dollar following the release of jobs data from the US and Canadian dockets. The mixed Canadian jobs data and the weak US non-farm payroll data fueled the pair's weakness.
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According to the latest Canadian jobs data from Statistics Canada, the country added 59,900 jobs beating analysts' estimates of 19,800 new jobs. However, Canada’s unemployment rate rose slightly to 5.4% beating consensus estimates of 5.3% and the previous figure of 5.2%.Â
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On the other hand, the US added 209,000 nonfarm jobs in the past month as the US labour markets started showing signs of weakness after being robust for most of the year. The NFP data missed analysts' consensus estimates of 225,000 new jobs, which would have shown the US job market’s resilience.
Furthermore, the US labour force participation rate was recorded at 62.6% versus Canada’s 65.7%, indicating that a more significant portion of Canada’s workforce is working compared to the US. Combining all the jobs-related data released today, Canada emerges stronger than the US.
The jobs data tends to affect the interest rate decisions made by the US Federal Reserve and the Bank of Canada. A robust job market gives the central bank room to hike rates further, while a weakening job market could make a central bank halt rate hikes.
Therefore, based on today’s data, we can conclude that the Bank of Canada has more room to hike rates without triggering a recession. Given the softening jobs market, the Federal Reserve may also have less wiggle room regarding future rate hikes.
The Canadian dollar was also boosted by the upbeat crude oil prices that have been inching higher this week as tracked by the West Texas Intermediate (WTI), although the crude benchmark had minimal gains today.
It remains to be seen whether today's downtrend shall extend into next week, but only time will tell.
*This is not investment advice.
The USDCAD price chart.
The USDCAD currency pair was trading down 56.0 pips (0.42%) as the Canadian dollar rallied against the US dollar.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.