The Canadian dollar has posted gains on Monday, continuing the upward movement which marked the Friday session. In North American trade, USD/CAD is trading at the 1.3270 level. On the release front, today’s key event is US ISM Non-manufacturing PMI. The index is expected to improve to 55.3 points. There are no Canadian releases on the schedule.
Employment numbers were on center stage on Friday, as both Canada and the US released key employment indicators. In the US, the numbers were a mix. readings were mixed. Nonfarm Payrolls improved to 178 thousand, edging above the forecast of 177 thousand. This marked a 4-month high. However, Average Hourly Earnings, which measures wage growth, surprised with a decline of 0.1%, short of the estimate of 0.2%. This was the first decline in wage growth since March. The unemployment rate dropped to just 4.6%, well below the forecast of 4.9%. The strong labor market has been a key factor in the strong US economy, which saw GDP grow at a clip of 3.2% in the third quarter. Canadian employment indicators were solid, as Employment Change gained 10.7 thousand, much better than the estimate of -16.5 thousand. As well, the unemployment rate dropped to 6.8%, below the forecast of 7.0%. The Canadian dollar responded with gains, as USD/CAD dropped to 1.3254, its lowest level since mid-October.
The Canadian dollar enjoyed an excellent week, posting gains of 2.0%. The currency posted strong gains on Thursday, responding positively to the unexpected news that OPEC had reached an agreement to cut crude production levels. One of the major sticking points had been Iran’s insistence to maintain output at pre-sanction levels. Saudi Arabia swallowed hard and accepted Iran’s demand, paving the path for the first production agreement by OPEC since 2008. Oil prices jumped on the news and the Canadian dollar posted gains as well. The rally continued on Friday, as Canadian employment numbers beat expectations.
USD/CAD for Monday, December 5, 2016
Open: 1.3326 High: 1.3349 Low: 1.3271 Close: 1.3273
S1 S2 S1 R1 R2 R3
1.3026 1.3120 1.3253 1.3371 1.3457 1.3551
USD/CAD showed limited movement in the Asian and European sessions. The pair has recorded considerable losses early in North American trade
1.3253 has weakened in support following losses by USD/CAD
1.3371 is the next resistance line
Further levels in both directions:
Below: 1.3253, 1.3120 and 1.3026
Above: 1.3371, 1.3457, 1.3551 and 1.3648
Current range: 1.3253 to 1.3371