The Canadian dollar is drifting on Monday. In the European session, USD/CAD is trading at 1.4334, down 0.11% on the day.
Canada’s employment blows past market estimate
Canada posted stronger-than-expected growth on Friday, but the Canadian dollar showed little reaction. The economy created 76 thousand jobs in January, crushing the market estimate of 25 thousand and following a December gain of 90 thousand. This marked the sixth straight monthly increase as the labor market remains strong despite a weak ecconomy. The unemployment rate dipped to 6.6%, down from 6.8% and below the market estimate of 6.7%.
The jobs numbers were positive but hanging over the report is the risk of a trade war with the United States, which was narrowly avoided last week, when the US imposed and then suspended tariffs against Canada. President Trump suspended the tariffs for 30 days and the Bank of Canada’s next rate decision on March 12 will depend on economic data and whether the tariffs are reinstated.
US Nonfarm Payrolls miss estimate
US nonfarm payrolls eased to 143 thousand in January, shy of the market estimate of 175 thousand. Still, there weres signs of strength in the labor market – nonfarm payrolls were revised by 100 thousand in the previous two months and the unemployment rate ticked lower to 4% from 4.1%, below the market estimate of 4.1%. Average hourly earnings rose 0.5%, up from 0.3% in December and above the market estimate of 0.5%. Annually, average hourly earnings rose 4.1%, unchanged from the revised December reading and above the market estimate of 3.8%. The generally positive employment report supports the case for the Federal Reserve continuing to hold rates, possibly until the third quarter.
USD/CAD technical
-
USD/CAD is testing support at 1.4333. Below, there is support at 1.4304.
-
There is resistance at 1.4375 and 1.4404.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD stays defensive below 1.0500 amid light trading
EUR/USD struggles to capitalize on recent upside and oscillates in a narrow range below 1.0500 in European trading on Monday. However, the pair's downside remains cushioned by persistent US Dollar weakness and an upbeat mood. Focus shifts to central bank talks.
GBP/USD ranges near 1.2600 as US Dollar steadies
GBP/USD keeps its range near 1.2600 in the early European session on Monday. The pair stays support amid a subdued US Dollar price action following Friday's disappoining US Retail Sales data. Thin trading is likely to extend as US markets are closed in observance of Presidents' Day.
Gold: Bulls have the upper hand near $2,900 amid trade war fears and weaker USD
Gold regained positive traction on Monday amid sustained USD weakness. Concerns about Trump’s tariffs further benefit the safe-haven XAU/USD pair. The fundamental and technical setup underpin prospects for additional gains.
Five fundamentals for the week: Peace talks, Fed minutes and German election stand out Premium
US President Donald Trump remains prominent, especially in a week when high-level peace talks kick off. Nevertheless, the Commander-in-Chief competes with the world's most powerful central bank, and other events are of interest as well.
Tariffs likely to impart a modest stagflationary hit to the economy this year
The economic policies of the Trump administration are starting to take shape. President Trump has already announced the imposition of tariffs on some of America's trading partners, and we assume there will be more levies, which will be matched by foreign retaliation, in the coming quarters.
The Best Brokers of the Year
SPONSORED Explore top-quality choices worldwide and locally. Compare key features like spreads, leverage, and platforms. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold.