USD/CAD – Canadian dollar improves after stellar employment numbers

USD/CAD started the Friday session quietly, but has posted losses in the North American session. The pair is currently trading at 1.3255, down 0.40% on the day. On the release front, there are no U.S. events. The Canadian economy created 66.8 thousand jobs in January, crushing the estimate of 6.5 thousand. The unemployment rate edged up to 5.8% in January, compared to 5.7% a month earlier.

It’s been a rough week for the Canadian dollar, which has slipped 1.2%. Will the slide continue next week? Investors are increasingly concerned that the U.S and China will not be able to reach a trade deal. On Thursday, President Trump said that he had no plans to meet with Chinese President Xi before March 2, when further U.S. tariffs are scheduled to be imposed against China. This has raised concerns that a trade deal will not be reached prior to the March 2 deadline. Trump’s remarks chilled risk appetite, sending U.S. equity markets and the Canadian dollar lower on Thursday.

The Bank of Canada appears to have taken a page out of the Federal Reserve’s playbook, and is expected to ease monetary policy this year after aggressively raising rates in 2018. On Wednesday, BoC Deputy Governor Tim Lane said that Canada’s fundamentals were strong and unemployment was at historically-low rates. However, Lane noted that the Canadian dollar was under pressure due to lower oil prices, a soft housing market and a decline in business investment due to uncertainty over U.S. trade policies.

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USD/CAD Fundamentals

Friday (February 8)

  • 8:15 Canadian Housing Starts. Estimate 206K. Actual 208K
  • 8:30 Canadian Employment Change. Estimate 6.5K. Actual 66.8
  • 8:30 Canadian Employment Rate. Estimate 5.7%. Actual 5.8%

*All release times are EST

*Key events are in bold

USD/CAD for Friday, February 8, 2019

USD/CAD, February 8 at 9:05 EST

Open: 1.3308 High: 1.3329 Low: 1.3232 Close: 1.3255

USD/CAD Technical

S3 S2 S1 R1 R2 R3
1.3049 1.3125 1.3200 1.3290 1.3383 1.3445

USD/CAD ticked higher in the Asian session and was flat in European trade. The pair has posted losses in North American trade

  • 1.3200 is providing support
  • 1.3290 is the next resistance line
  • Current range: 1.3200 to 1.3290

Further levels in both directions:

  • Below: 1.3200, 1.3125 and 1.3049
  • Above: 1.3290, 1.3383, 1.3445 and 1.3547

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 that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.