The Canadian dollar ended last week with sharp gains, and hasn’t missed a beat in Monday trade. In the North American session, the pair is trading at 1.2956, down 0.76% on the day.
USD/CAD falls below 1.30 line
A winner in the US election was finally declared on Saturday, after four long days of painfully slow vote-counting in several battleground states. Besides Joe Biden, the financial markets are also looking like winners, as equities and commodities have moved higher. The glaring exception is the US dollar, which has played the sad-sack role as the other G-10 currencies have taken advantage and recorded sharp gains against the dollar. The Canadian dollar racked up gains of 1.99% last week, its best weekly performance since June. The upswing has continued on Monday, as USD/CAD has dropped below the symbolic 1.30 level for the first time since October 2018.
Canada posts solid job data in October
On Friday, Canada released key employment numbers for October. The numbers were positive, but solid employment releases in the US as well left the Canadian dollar almost unchanged on Friday. Canada’s economy created 83.6 thousand jobs. Although this was a far cry from the previous release of 378.2 thousand, it beat the forecast of 59.0 thousand. Unemployment was expected to remain pegged at 9.0%, but edged lower to 8.9 per cent. This was its lowest level since March, prior to Covid, which saw the unemployment rate soar into double digits. The week wrapped up with Ivey PMI, which came in at 54.5, up from 54.3 beforehand. This points to modest expansion, as the economy continues to take small steps towards recovering from the sharp downturn in the second quarter.
- There is resistance at 1.3099, followed by resistance at 1.3136
- 1.2945 was tested earlier in support. The next support line is at 1.2844
- USD/CAD crossed below the 50-day MA last week, and the pair continues to move lower
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