Canadian Dollar shrugs after strong Canadian jobs report
|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
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USD/CAD is testing support at 1.4333. Below, there is support at 1.4304.
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There is resistance at 1.4375 and 1.4404.
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