USDCAD rebounds sharply from daily lows and adds over 60 pips after stronger than expected NFP data. The United States Nonfarm Payrolls came in at 266K, beating forecasts of 180K in November. The U.S. Unemployment Rate came in at 3.5% below expectations of 3.6%. The Average Hourly Earnings (year over year) came in at 3.1% beating expectations of 3%, while the monthly reading for the Average Hourly Earnings came in at 0.2%, below the forecasts of 0.3% in November.
Canada Unemployment Rate Higher than Expected
On the other hand the Canada Unemployment Rate came in at 5.9%, worse than markets expectations of 5.5% in November; the Participation Rate came in at 65.6%, worse than expectations of 65.7%, the Net Change in Employment came in at -71.2K below expectations of 10K in November.
Yesterday, dismal data came out of U.S. as the United States ISM Non-Manufacturing PMI came in at 53.9 below expectations of 54.5 in November, put additional pressure to an already vulnerable USD today.
Bank of Canada on Hold
The Bank Of Canada kept it’s benchmark interest rates unchanged as widely expected by markets. The Bank Rate now is 2% and the deposit rate is 1.5%.
The central bank of Canada in its press release noted that the global economy is stabilizing and the forecasts from the October meeting is intact. The U.S.-China trade tensions increase the risk to the downside. Canada’s investing spend growth was strong in the 3Q. Bank of Canada expects the inflation to stay around the 2% level in the next two years.
BoC future interest rate decisions will be guided by the Bank’s continuing assessment of the impact of trade tensions against the sources of resilience in the Canadian economy, the consumer spending and housing investment activity.
USDCAD regains the positive momentum that lost two days ago as the pair breached the 50 and 100-day moving average after the stronger NFP data.
The pair trades at daily high at 1.3253 having breached the two major moving averages, resistance now can be met at 1.3253 the daily top, followed by the strong resistance at 1.3278 the 200-day moving average.
Immediate resistance for the pair stands at 1.3170 the daily low while more offers will emerge at 1.3157 yesterday’s low. In case that the pair breach yesterday’s low the next target to the downside is the 1.3137 low from November 6th.More content