Topic: COZfx: USD/CAD weekly outlook
COZforex: The US dollar declined to more than 2 week lows against the Canadian dollar on Friday after a stronger-than-forecast Canadian jobs report for January dampened expectations for a rate cut by the Bank of Canada.
USD/CAD hit 1.0969, the weakest since January 22 and was last down 0.34% to 1.1031. For the week, the pair was down 0.69%, the worst weekly performance in five months. Coz forex senior derivatives trader Daniel • Moloney said, the pair is likely to find support at 1.0900 and resistance at 1.1078, Friday’s high.
The Canadian economy added 29,400 jobs last month, Statistics Canada said, after shedding 44,000 jobs in December. It was the largest increase since August and beat expectations for jobs growth of 20,000.
The Canadian Dollar gained momentum despite data indicating that the international merchandised trade deficit in Canada unexpectedly widened for a third consecutive month to $1.7 billion in December, compared to a revised deficit of $1.5 billion recorded in the previous month. The Loonie further received support after another report revealed that, Canada’s Ivey purchasing managers index bounced back to expansionary territory and rose to a level of 56.8 in January, surpassing analysts’ call for a rise to 51.0, from previous month’s reading of 46.3.
The nation’s unemployment rate ticked down to 7.0% from 7.2% in December. The data prompted investors to trim back expectations for a rate cut by the BoC at its next policy meeting in March.
Meanwhile, official data showed the US economy added jobs at a slower-than-forecast rate in January. The U.S. economy added 113,000 jobs in January, the Labor Department said, well below expectations for jobs growth of 185,000, after December's lackluster gain of 75,000 jobs.
Yet the report also showed that the number of people participating in the labor force edged up to 63% from a 30-year low of 62.8% last month, while the unemployment rate unexpectedly ticked down to a 5 years low 6.6% from 6.7% in December.
The report was seen as unlikely to derail reductions in the Federal Reserve’s stimulus program. The bank announced a second $10 billion cut to its asset purchase program in January, reducing it to $65 billion-per-month.
(COZ forex UK)