The USDCAD currency pair was trading down over 76 pips as the Canadian dollar rallied higher against its US counterpart, driving the entire pair lower. The Canadian dollar, also known as the loonie, rallied higher, bolstered by the release of the latest labour market data from the country.
USDCAD Falls As Canadian Dollar Rallies on Upbeat Jobs Data
The USDCAD currency pair was trading down over 76 pips as the Canadian dollar rallied higher against its US counterpart, driving the entire pair lower. The Canadian dollar, also known as the loonie, rallied higher, bolstered by the release of the latest labour market data from the country.
According to the latest labour market data from Statistics Canada, the country added 24,900 jobs, beating analysts’ consensus estimates of 15,000 new jobs. At the same time, the unemployment rate rose to 5.8%, marking the highest level since January 2022.
The lack of employment data from the US left the US dollar, also known as the greenback, vulnerable to attack even as investors wait patiently for the Fed Chair, Jerome Powell’s speech scheduled for later today.
A deeper breakdown of Canada’s employment data showed that full-time jobs increased by 59,600, while part-time jobs declined by 34,700, leaving the average number of new jobs at 24,900.
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The Economists at TD Securities said the following about the Canadian dollar and the country’s economy:
“Canada has heavy trade and economic links to the US and has outperformed non-USD peers on the US exceptionalism trade. We see this reversing into next year as the US catches down to the rest of the world. In terms of domestic vulnerabilities, upcoming mortgage renewals will keep a lid on household consumption. However, Canada will have tailwinds from two offsetting factors, namely population growth and excess savings.”
The Canadian dollar was also bolstered by the deep voluntary production cuts announced by OPEC+, which are likely to keep global crude oil prices stable into next year. The OPEC+ group has agreed on production cuts up to the end of Q1 2024 to boost crude oil prices.
The loonie has remained more robust than the greenback since the downtrend in the USDCAD currency pair began in early November. Given the loonie’s performance today, the trend will likely continue until the economic trends between the two countries start reversing.
