USD/CAD – Canadian Dollar Higher After Excellent Canadian Job Numbers

The Canadian dollar has edged higher in the Monday session. Currently, USD/CAD is trading at 1.3260. On the release front, the BoC will release its Business Outlook Survey, which is released every quarter. There are no major US releases on the schedule. On Tuesday, the US releases JOLTS Job Openings, which is expected to climb to 5.59 million. Canada will publish Building Permits, with an estimate of 2.4%.

Canada and the US released key employment numbers on Friday. In the US, wages rebounded in December, as Average Hourly Earnings climbed 0.4%, edging above the estimate of 0.3%. This marked a strong turnaround after the November reading of -0.1%. The news was not as bright from Nonfarm Payrolls, which dropped to 156 thousand, well off the estimate of 175 thousand. This marked a 3-month low, but the dollar still posted gains. The unemployment rate edged up to 4.7%, matching the forecast. In Canada, Employment Change surged with a gain of 53.7 thousand, crushing the forecast of -5.1 thousand. The unemployment rate edged up to 6.9%, as expected.

The US dollar was broadly lower on Thursday, after the Federal Reserve released the minutes of its December meeting. The minutes were cautious in tone, with Fed policymakers essentially saying that monetary policy in the coming months will be dictated in large part by the economic platform of the incoming Trump administration, which remains unclear. FOMC members expressed concern about higher inflation levels, given the “prospects for more expansionary fiscal policies in the coming years”. This is a clear reference to president-elect Trump’s plans to increase fiscal spending and cut taxes, which would likely result in higher inflation, something the US hasn’t had to deal with in years. Still, policymakers haven’t changed their view that gradual rate hikes remains an appropriate monetary policy. Many analysts are predicting another rate hike in June, but this forecast could easily change, depending on the performance of the US economy in the first half of 2017.

Canada Adds 54,000 jobs; Unemployment hits 6.9%

USD/CAD Fundamentals

Monday (January 9)

• 10:00 US Labor Market Conditions Index
• 10:30 BoC Business Outlook Survey
• 15:00 US Consumer Credit. Estimate 18.3B

Tuesday (January 10)

• 8:30 Canadian Building Permits. Estimate 2.4%
• 10:00 US JOLTS Job Openings. Estimate 5.59M

*All release times are GMT

*Key events are in bold

USD/CAD for Monday, January 9, 2017

USD/CAD January 9 at 8:25 EST

Open: 1.3240 High: 1.3277 Low: 1.3224 Close: 1.3260

USD/CAD Technical

• USD/CAD has shown limited movement in the Asian and European sessions
• 1.3253 is a weak support line
• 1.3371 is the next resistance line

Further levels in both directions:

• Below: 1.3253, 1.3120, 1.3003 and 1.2922
• Above: 1.3371, 1.3457 and 1.3589
• Current range: 1.3253 to 1.3371

OANDA’s Open Positions Ratio

USD/CAD ratio is unchanged in the Monday session. Currently, long positions have a majority (58%), indicative of trader bias towards USD/CAD continuing to move higher.

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