The US dollar continued to climb higher against the Canadian dollar with the opening of the New York session, supported by a deteriorated risk sentiment, tensions in the Middle East, and better-than-expected ADP non-farm employment numbers for December.
Iranian military forces fired a dozen missiles at US bases in Iraq early Wednesday in retaliation for a US drone attack that killed Qassem Suleimani, a top-ranked Iranian general. Nevertheless, despite elevated tensions in the region, the possibility of an escalation seems limited since there were no major casualties of the Iranian attack.
The ADP non-farm employment report showed that private-sector employment rose by 202.000 jobs in December, beating forecasts of a 160.000 change in jobs. Companies of all sizes created jobs in December, led predominantly by midsized companies. The service sector also posted the largest gains in jobs in the last eight months, according to the report.
Still, the ADP report represents only an estimation of the number of new jobs created. The actual non-farm employment change, released by the Bureau of Labor Statistics, is scheduled for release on Friday with market expectations set for a 150.000 rise.
While there are no important market reports coming from Canada today, lower oil prices for the third straight day started to weigh on the Canadian dollar which traded at 1.3014 against the greenback, as of 2:00 p.m. London time.
Charts show a potential resistance zone around the mid-1.30s, formed by the October 29 low. The trend in the pair remains to the downside with the December 31 low of 1.2951 acting as an important support level.