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The US dollar caught a significant bid against the Canadian dollar in today’s session after the US labour market beat forecasts with a whopping 266,000 gain in jobs in November.
Not only did the US economy create the highest number of jobs since January, but the unemployment rate also fell to a half-century low of 3.5% and wages gained 3.1% from a year earlier, exceeding market expectations. November was also the first month that included General Motors Co. workers who returned to work after a strike, adding 41,300 to the payrolls number.
The labour market report backs the Federal Reserve view to keep interest rates unchanged for the time being, after three consecutive cuts. As noted earlier by the central bank, labour market remains robust and could fuel further economic growth.
Unlike the roaring numbers from the US, the Canadian jobs report failed to impress. Canada’s employment fell by 71.2K in November, missing forecasts of a 10K rise, and the unemployment rate jumped to 5.9% – the highest level since October last year. Average hourly earnings also came in lower than expected at 0.2%.
Both the US and Canadian labour market reports took the markets quite by surprise, given the slowing trend in US NFP and acceleration in Canadian job numbers in recent months.
Following the reports, the Canadian dollar gave back most of its post-BoC gains in today’s session, falling as much as 0.64% against the greenback at the time of writing. As of 2:30 p.m. London time, the USD/CAD pair traded at 1.3257, up from an intraday low of 1.3171.
The resistance zone of a recent range could help the Canadian dollar pick up some support around the 1.3270 level in the short-term.
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