Canadian Dollar Fluctuates Amidst Strong US Jobs Data

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– The Canadian Dollar (CAD) experienced a rollercoaster ride against the US Dollar (USD) following the release of the US Nonfarm Payrolls (NFP) report, initially dropping to a weekly low before recovering to a three-day high.

– The NFP report showed a surprising surge in US employment, with 216,000 new jobs added in December, significantly exceeding the forecasted 160,000.

– Canada’s labor market faced challenges, adding a meager 0.1K jobs, well below the margin of error, while wage growth accelerated to a two-year high of 5.7%.

– The US Unemployment Rate remained steady at 3.7%, defying market expectations of an increase to 3.8%, coupled with a slight uptick in Average Hourly Earnings to 4.1%.

– Despite the positive US data, the ISM Services Purchasing Managers’ Index (PMI) fell short of expectations, printing at 50.6 against the projected decline from 52.7 to 52.6.

– Canada’s Unemployment Rate held flat at 5.8%, beating the forecast of 5.9%, but Average Hourly Wages jumped from 5.0% to 5.7% in December.

– Canadian Ivey PMIs remained upbeat in seasonally adjusted terms but dipped into contractionary territory in non-seasonally adjusted terms.

– The CAD outperformed most major currencies against the USD, gaining a fifth of a percent.

Technical analysis suggests a pause in the USD/CAD pair’s movement, with the pair hovering near the 1.3330 level. The 200-day Simple Moving Average (SMA) acts as a resistance at 1.3500, while the 50-day SMA is poised for a downside crossover of the longer moving average.

USD/CAD Hourly Chart

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