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The US dollar declined versus its Canadian counterpart for the third straight session on Thursday. The US dollar Canadian dollar exchange rate closed down 0.2% at 1.3176. The Canadian dollar has rallied 0.75% versus the US dollar this week.
US dollar investors shrugged off the broadly better than forecast macro-economic data on Thursday. Instead US dollar traders were looking ahead to the US non-farm payroll release later today. The US Labour Department non farm payroll is the most highly anticipated data point of the month. This is because it’s the most complete write up of the US labour market produced by the Federal Government.
Analysts are expecting that 180,000 jobs were created in November in the US. This is most than the 128,000 that were created in October. However, there have been some signs this week that the non-farm payroll number may disappoint. The leading indicators for the jobs report were weak. The ADP private payroll report saw just 67,000 jobs in the private sector created. This was short of the 140,000 that were forecast. The employment component in the ISM manufacturing and non-manufacturing reports declined in November. Using these figures investors calculated that the headline job creation figure today could be weaker than forecast.
The non-farm payroll report is also expected to show unemployment remained steady at 3.6% and that hourly wages ticked higher to 0.3% in November, up from 0.2%. Any weakness in the report could send the US dollar lower.
Oil In Focus Amid OPEC+ Meeting
The Canadian dollar maintained its strength in the previous session after the Bank of Canada adopted a more hawkish than expected tone at the most recent monetary policy meeting earlier in the week. This has certainly given a near term boost to the Canadian dollar, whether this translates into longer term gains depends on whether the BoC’s wait and see approach remains or whether the BoC follows other central banks easing in 2020.
Oil prices dipped after rallying over 4% on Wednesday. The pull back in the price of oil helped rein in gains on the commodity sensitive Canadian dollar. Oil will remain in focus at the final day of the OPEC meeting. The OPEC+ group are expected to extend the current production cuts.
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